We have recently been involved in estimating a number of Asymptotically Ideal Model (AIM) forms on multiple data sets, and the experience has led us to consider the connection between theory and practice in some detail. The AIM has a number of claimed advantages that make it desirable as a basis for producer input demand and consumer product demand systems. The principal ones are (i) its ability to approximate a function over the entire range of the sample, (ii) its global flexibility, (iii) its capacity to impose regularity conditions globally rather than just locally, and (iv) its resistance to overfitting. We touch on each of these properties very briefly-they are developed in mathematical detail in the references noted-before turning to an analysis of our overall empirical experience.

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“Globally Flexible Asymptotically Ideal Models,” A.Saha, A. Havenner, American Journal of Agricultural Economics, 81 (1999), 703-710