Investigation of Allocation System in Urban Household Budget (Differential System Demand Approach)

Document Type : Original Article


1 Sistan and Baluchestan University, Faculty member

2 Ilam University, Faculty member


This Study investigates consumer demand for goods and survey allocation system in Iran. A complete system demand equation describes how total consumer resources are being allocated over various uses. The allocation is modified in response to changes in the structure of prices. In order to study the response of demand for goods to prices and total expenditure, many differential demand system have been estimated (CBS, NBR, AIDS and Rotterdam).
Statistical measures indicated that Rotterdam is the best model in comparison with other models (CBS, NBR and AIDS).In this study calculated elasticities from the Rotterdam model with both homogeneity and symmetry assumptions have been used. The result of this paper shows that the expenditure elasticity of “Eating group” is greater than one, and expenditure elasticity of “House group” lesser than one. In other word , the result indicates that, “Eating group” is luxury good and “House group” is necessity good.


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