This paper presents an easy to apply formula which can be used to assess the efficiency gains from imposing symmetry constraints on a system of demand equations. The interrelationship of the correlation between errors and the correlation between variables is shown to have a significant impact on efficiency gains. Standard results on efficiency gains from seemingly unrelated regression are shown to be inapplicable.
|Original language||English (US)|
|Number of pages||6|
|State||Published - 1986|
ASJC Scopus subject areas
- Economics and Econometrics