A Quadratic Generalization of the Almost Ideal and Translog Demand Systems: An Application to Food Demand in Urban China

A new demand system, the QGAITL model, nesting the quadratic almost ideal, translog and LES models as its special cases, is introduced and estimated in this paper. Employing urban household data of four major food items from Jiangsu China in 2001, empirical evidence from both in-sample evaluations and out-of-sample forecasting comparisons shows that the QGAITL is superior to its nested models, whether or not demographic effects are incorporated