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	Almost Ideal Demand System	Demand System Estimation
Field	Economics	Economics
Family	Regression model	Regression model
Year of origin	1980	1954
Originator	Angus Deaton & John Muellbauer	Richard Stone (linear expenditure system); developed by Deaton, Muellbauer, Theil, Barten
Type	Flexible complete demand system in budget-share form	System of structural demand equations estimated jointly
Seminal source	Deaton, A., & Muellbauer, J. (1980). An almost ideal demand system. The American Economic Review, 70(3), 312–326.	Stone, R. (1954). Linear expenditure systems and demand analysis: an application to the pattern of British demand. The Economic Journal, 64(255), 511–527.
Aliases	AIDS, Deaton-Muellbauer Demand System, LA-AIDS, Almost Ideal Demand Model	Consumer Demand System, System of Demand Equations, Complete Demand System, Demand System Analysis
Related	3	3
Summary	The Almost Ideal Demand System (AIDS), introduced by Angus Deaton and John Muellbauer in 1980, is the workhorse flexible demand system in applied microeconomics. It models each good's budget share as a linear function of the logarithms of all prices and of log real total expenditure, derived from a flexible (PIGLOG) cost function. The form is 'almost ideal' because it satisfies the axioms of choice exactly, aggregates consistently over heterogeneous consumers, has a functional form that is a first-order approximation to any demand system, and can be estimated and tested for homogeneity and symmetry with linear regression once a price index is specified.	Demand system estimation jointly models how a consumer or population allocates a budget across a complete set of goods, estimating a system of equations — one per good — that relate each good's expenditure share or quantity to all prices and total expenditure. Unlike a single-equation demand curve, a demand system imposes the cross-equation restrictions implied by consumer theory: adding-up (shares sum to the budget), homogeneity (no money illusion), and Slutsky symmetry (consistency of cross-price effects). Classic functional forms include Stone's Linear Expenditure System, the Rotterdam model, and the Almost Ideal Demand System, and the system is estimated with seemingly unrelated regression or full-information methods.