From a mathematical point of view, if the function $f(x,y)$ is homogeneous (of any degree), and $g()$ is a function whose first derivative is everywhere non-zero, then the function
$$H(x, y) = g[f(x,y)]$$
is homothetic. In economics, we usually impose something more restrictive, namely that $g' >0$. But this makes a homothetic function a monotonic ...
Here a short answer: Homothetic, identical preferences have the modelling advantage that the distribution of income across individuals does not matter for aggregate demand. That is, if you want to study, let's say, monetary policy where you do not expect changes in the distribution of income to affect your policy recommendations, then this is a reasonable ...
Let me answer the question by following @HRSE's explanation and recommending a good reading. Eaton and Kortum (Ecta, 2002) use homothetic preferences, a convenient assumption to get a tractable general equilibrium Ricardian model of trade. However, there is exhaustive evidence that the income elasticity of demand varies across goods and that this variation ...
Yes, you can run diff-in-diff with aggreggate treatment in this case.
Yes, standard errors should be clustered at the treatment (here=state) level.
No, the number of clusters is not an issue, as the relevant number is the total number of clusters and 50 should reasonably avoid the small cluster problem.
The way you can think about this is to forget states ...
As I understand it, you're trying to estimate a demand system for different goods.
Have a look at Aguiar and Bils (forthcoming AER), who use the consumption expenditure survey to do exactly that. The previous link also contains their data and code.
From their abstract:
We do so by constructing an alternative measure of consumption expenditure, using ...
If I understood you correctly, $\Lambda(x_i'\hat\beta)$, where $\Lambda(x) = e^x / (1+e^x)$. You can use predict in both R and Stata. Try in Stata:
*** Generate data
set obs 10
set seed 1
gen x = rnormal()
gen y = 1+x+rnormal() > 0
replace y = . in 7/10
logit y x
predict phat, p
For clarification, I presumed ...
Compustat Annual is used in Gabaix and Landier (2008). A famous stylized fact is the power-law distribution (by Gabaix again) of firm sizes. But power-law claims have been criticized as resulting from poor measurement.
The US Panel Survey of Income Dynamics (PSID) has this data, at least if pre-tax income will do.
We use the 1999-2009 Panel Survey of Income Dynamics to estimate household move probabilities as a function of, among other things, current housing equity. The lock-in effect supposes that mobility decreases with equity, particularly as equity becomes ...
The rent figure in the question relates to the centre of Ho Chi Minh City and it is a fallacy to infer that it is typical of the whole of Vietnam. There is a body of theory going back to von Thunen suggesting that land rents will generally fall with distance from a city centre, forming a rent gradient. Given a free market in land and property, residents and ...
The household owns an asset, the house, from which an income can be derived. The household could decide to let the house and with the income rent another house. Alternatively, the household could decide to live in the house that they own. In the latter case household income would be lower, unless imputed rental income is considered.
So calculating and ...
Yes, you can consider this as panel data, but the key is to understanding why, as this affects how you explain and interpret your panel regression. In treating each cohort as the same unit over time, you are assuming that each cohort has a constant, unobserved fixed effect. That is, people in a particular age category and gender tend to have an unobserved ...
According to Wikipedia and this notes from HKU, the indirect utility function is part of consumer theory, and is defined as the maximum utility that can be attained given a consumers' money income, and goods prices. It reflects both the consumer's preferences and market conditions. It is a model which helps to understand how consumers optimize their ...
In the World Bank website you can find data on remittances such as
Annual and Monthly Remittance Flows to Selected Countries,
Bilateral Remittances Matrices,
Household survey data on migration and remittances.
One reason could be price discrimination. For instance, the same apartment is not rented the same price for locals vs (rich) foreigners.
Other potential reasons:
the apartment could also be furnished or designed specifically for rich people (product differentiation);
the given price could be a base price subject to harsh negotiation;
locals may have ...
I've heard of this phenomenon but not for the reasons you suggest:
The largest corporations tend to have the most interlocks (Table 4).
This may occur because the directors of the largest corporations are
the most knowledgeable, the most capable, and the most accomplished
men available. Other corporations would naturally seek their advice