Bayes Estimates for the Price and Income Elasticities of Alcoholic Beverages in Finland From 1955 to 1980 |
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Authors: | Juha Ahtola Anders Ekholm Antti Somervuori |
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Institution: | 1. Department of Economics , University of Helsinki , Aleksanterinkatu 7, 00100 Helsinki, Finland;2. The Research Institute of the Finnish Economy , Lonnrotinkatu 4 B, 00120 Helsinki, Finland;3. Department of Statistics , University of Helsinki , Aleksanterinkatu 7, 00100 Helsinki, Finland;4. The Finnish State Alcohol Company , Economic Research and Planning, PL 350, 00101 Helsinki, Finland |
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Abstract: | The Lindley–Smith theory of Bayes estimates for multiple regression equations with exchangeability between the regression coefficients of the individual equations is extended to the case in which a first-order autoregressive process generates the regression coefficients. The ensuing formulas are applied to study monthly Finnish consumption of alcohol. The point of this application is that exchangeability between the regression coefficients is less than we can assess beforehand when there is a natural ordering, in this case according to chronological time, of the equations. Still, the general task of the Lindley–Smith estimators, to consider the combined data when estimating individual regression coefficients, is a relevant one. |
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Keywords: | Alcohol consumption Autoregressive model Lindley–Smith theory Random coefficients |
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