Farmers' expenditure in Greece: an application of transformation of the variables

Abstract

This paper examines Farmers' expenditure patterns in Greece for eight major
categories of goods and services that together taken exhaust a large percentage of
their total expenditure. The analysis is based on the Greek survey of expenditures
in 1982. Barten's (1964) general model for the per capita Engel curves is specified
over four traditional functional forms. The transformation of variables analysis
of Box and Cox (1964) has been used in order to search for the «best» functional
form for each category of goods and services considered. Results show Engel re.
lationships to require different functional forms for different expenditures. These
forms are not the frequently employed linear or log - inverse ones. Expenditure
elasticities estimated at mean values of the variables in each best functional form
indicate a considerable change in the allocation of total expenditure in a stated per
centage increase of Farmers income.