Consumer behaviour in Greece: an application of the almost ideal demand system

This paper estimates the Almost Ideal Demand System on Greek data for the period 1960–1986 for seven commodity groups. The results conform with earlier research findings that the homogeneity and symmetry restrictions of demand theory are broadly inconsistent with the data. The imposition of the restrictions leads to substantial changes in the estimated elasticities in both the static and dynamic specifications. The introduction of habit effects with lagged consumption, supported statistically by the data, led to plausible results leaving, however, the problem of rejection of homogeneity and symmetry intact.