Almost ideal demand system

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The Almost Ideal Demand System (AIDS) (1980) is a consumer demand model used primarily by economists to study consumer behavior. The AIDS model gives an arbitrary first-order approximation to any demand system and has many desirable qualities of demand systems. For instance it satisfies the axioms of order, aggregates over consumers without invoking parallel linear Engel curves, is consistent with budget constraints, and is simple to estimate.

Origin[edit]

The AIDS system is derived from the piglog model, which allows researchers to treat aggregate consumer behavior as if it were the outcome of a single maximizing consumer.

References[edit]

  • An Almost Ideal Demand System, Angus Deaton, John Muellbauer, The American Economic Review, Vol. 70, No. 3. (Jun., 1980), pp. 312-326. [1]