Regular Effective Demand Systems (REDS)

Empirical demand analysis is usually conducted on the basis of either ‘regularity’ or ‘flexibility’. This paper takes a middle ground between ‘regularity’ and ‘flexibility’, offering a compromise in the form of a new specification termed ‘REDS’. •Our ‘Regular Effective Demand System’ (REDS) is a regularity/flexibility compromise.•The compromise combines ‘effective flexibility’ with ‘effective global regularity’.•REDS is designed for situations where individual commodity prices are lacking.•Own and cross-price elasticities may be generated without knowing actual prices.•We advocate variation of elasticities depending upon socio-demographic factors.