ABSTRACT
Household consumption in the estimation model should normally include all commodities and services. However, consumption data are available only on three aggregate goods, i.e., staple food, nonstaple food, and other food, and not on non-food commodities or services. Except for staple food, these aggregate categories are not found on the production side, where only production of individual products is available. Separability is assumed, which allows separate estimation of demand and supply side; however, error terms in demand functions for each commodity and supply functions for each commodity are not independent, and the demand and supply equations should be estimated as systems of simultaneous equations. Selection of survey variables for inclusion in the income distribution survey left much to be desired from the viewpoint of estimating a full household model. Omission of starting and ending stocks of grain, other commodities, and financial assets and liabilities also makes it impossible to reconcile balance sheets.
