LARROSA Juan Manuel Ceferino
Economic Examples of Latent Budget Analysis
LARROSA, JUAN M.C.
European Economics Letters
European Economics Letters Group
Lugar: Londres; Año: 2013 vol. 2 p. 44 - 44
Latent budget analysis is a classification technique that allows clustering identification by using compositional data. This paper presents examples of how this technique deals with the unit-sum constraint by establishing an initial independence model to which subsequent models are compared in terms of their relative fitness degree. In fact, latent budget analysis does not impose linearity, homogeneity, or even specific distributions on data. Examples analyzed in this work help to understand some important relationships between capital stock composition and income or food diet composition in a heterogeneous sample of countries.