Pooling International Consumption Data
Pooling consumption data from different countries for demand system estimation is attractive because it increases both sample size and therange of v ariation of relative prices and income. The major objection to pooling is that d ifferent countries may have different demand system parameters. This paper propo sed and estimates specifications that permit pooling while allowing both short-r un andlong-run demand systems to differ across countries. Using data from Belgi um, the United Kingdom, and the United States, the authors findthat, although p ooling was accepted for some pairs of countries and some specifications, it was rejected for most. They conclude that caution is appropriate in pooling internat ional consumption data.