Estimates for the demand system for India, based on equation 4 described in Appendix 1, are
presented in table 1. The parameters of the deleted equation were obtained through the adding-up
condition of demand parameters. Estimated elasticities are reported in table 2 and are evaluated at
midpoints. Theoretical restrictions, such as homogeneity and symmetry, were imposed. Most of the
parameter estimates were significant at the 1 percent level, suggesting a significant influence of prices
on budget share. The sign of price and expenditure were consistent with the theory, and their
magnitudes were within the expected range.