sumption behavior across income groups. They derive a demand model based on an integrable quadratic logarithmic expenditure share system and show that this model fits UK data better than the Working-Leser Engel types of models, particulalry for selected commodities. Blundell, Chen and Kristensen (2007) later showed that behavior changes across different types of goods with some goods approaching a linear or quadratic shape while others having different forms. More recently, Lewbel and Pendakur (2009) proposed the Exact Affine Stone Index (EASI) implicit Marshallian demand system. In the words of the authors: _“In contrast to the AID system, the EASI demand system also allows for flexible interactions between prices and expenditures, permits almost any functional form for Engel curves, and allows error terms in the model to correspond to unobserved preference heterogeneity random utility parameters.” (p.29)_ . Recent empirical works that attempted to estimate demand systems directly from data in developing countries include Attanasio, Di Maro, Lechene, and Phillips (2013) and Osei-Asare and Eghan (2013).

With respect to demand systems, our contribution is to compare the behavior of different welfare measures using alternative demand systems including simple Cobb-Douglas (CD), Linear Expenditure System (LES), the Almost Ideal Demand System (AIDS), the Quadratic Almost Ideal Demand System (QUAIDS) and the Exact Affine Stone Index (EASI). The paper finds that the difference in welfare measurement is minimal as compared to changes in other parameters such as the price change or the budget share.

Results of this paper can be relevant for a wide set of issues empirical economists are confronted with. Changes in prices occur for a variety of reasons. They may be induced by global shocks as it was the case for the global rise in commodity prices during the first decade of the 2000s or the 2008 global financial crisis, or they may be due to domestic shocks such as those induced by variations in local climatic conditions. Price changes may also occur as a result of economic policies such as changes in taxes, wages, subsidies or social transfers. In all these cases, the policy maker may want to estimate the impact on wellbeing _ex-post_ (for example in the case of economic shocks) or _ex-ante_ (for example in the case of economic policies). The work proposed applies to both cases and provides guidelines for macro or micro economists or for macro or micro simulation exercises of economic shocks or policy reforms.

Measuring changes in welfare due to changes in prices is also an issue very relevant for adjusting welfare measures (such as GDP or the poverty headcount) spatially or longitudinally and therefore measuring changes over time correctly. As the latest round of the global Purchasing Parity Power (PPP) surveys has shown, changes in data on prices can change welfare measurements very significantly. Changing measure or method for estimating welfare effects of price changes can obviously amplify or reduce the effect of price changes. Practitioners as well as international organizations engaged in measuring the impact of price changes on welfare give surprisingly little weight to the choice of estimation method. For example, the World Bank and the IMF use as methods of choice for spatial and longitudinal price adjustments the Laspeyers or Paasche indexes while they almost invariably use the Laspeyers index when simulating the impact of price changes on welfare, and this often irrespective of the magnitude of the price change. Theoretical economists, on the other hand, tend to privilege the equivalent variation or consumer’s surplus measures when it comes to measure changes in welfare due to price changes. A priori, these are normative decisions and good arguments can be found to justify each of these choices. But the outcomes of these choices can be very different in terms of welfare measure6