Work

Shadow demands for unobservable goods: an intertemporal incomplete demand approach

Year: 2025

Type: article

Abstract: For goods whose quantities are not observed or available, there are no explicit, but shadow, demands for them. To analyze these shadow demands, this paper presents a novel incomplete demand model that allows for intertemporal consumption behavior, as summarized by the Euler equation. This equation is then estimated, using French data (1977–2020), jointly with the demands for observed goods. This allows to identify the parameters characterizing the shadow demands for unobservable goods and to properly measure the welfare effects of price changes. Results indicate that in the absence of available quantity data for some goods, the proposed shadow demand model provides sufficient information to adequately analyze observed consumer behavior.

Source: Empirical Economics

DOI: 10.1007/s00181-025-02740-1

Authors: H. Youn Kim, José Alberto Molina, K. K. Gary Wong

Institutions: Western Kentucky University, Universidad de Zaragoza, University of Macau

Language: English

Topic: Economics of Agriculture and Food Markets

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,490

Funder: Universidad de Zaragoza