Spline Functions: An Alternative to Estimating Income-Expenditure Relationships for Beef

Abstract

Income-expenditure relationships are important components in many economic models used to project food expenditure and to understand food-expenditure behavior. The empirical estimation of income-expenditure relations has concentrated on the effects of income in explaining the variations of the household food expenditure. However, the problem of structural or parametric homogeneity for Engel curves in the analysis of household food expenditure behavior has received less attention in the applied demand literature.