Effective Purchasing Power in a Quantity Constrained Economy: An Estimate for the German Democratic Republic
The Review of Economics and Statistics
1986
A measure of microeconomic disequilibrium for households facing both budget and quantity constraints is estimated from East data. Using a new specification, the Flexible-Cobb-Douglas utility function, the parameters of a German direct utility function are estimated from West family budgets. It is estimated that an average East family in 1977 would have been willing to give up 13% of its total expenditure in order to attain its demands at official prices.
- DOI
- 10.2307/1924924
- Volume
- 68 (1)
- Pages
- 24
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