The Empirical Investigation of Rotterdam Demand System By Using Consumption Expenditures Data of Urban Households in West Azerbaijan Province

Abstract

The functional form of the consumer allocation models should be to satisfy theoretical derived from the consumer demand theory and must be able to explain the behavior of the consumer. In the first part of this paper, we have explained some of the theoretical characteristics of the consumer demand theory. At the second part of this paper, an empirical study has taken place by using consumption expenditures data of the urban households in West Azerbaijan province during the period 1979-2003. The results show that restricted and unrestricted Rotterdam demand system provide homogenous restriction but unrestricted Rotterdam demand system provide symmetry restriction and no restricted Rotterdam demand system.