INCOMPLETE DEMAND SYSTEMS AND SEMILOGARITHMIC DEMAND MODELS

The methodology of LaFrance and Hanemann for analysing the structure of incomplete demand systems is applied to models that are linear or logarithmic in quantities, prices and/or income. The structure of each model is presented when the implications of consumer choice theory are satisfied. The usefulness of the approach is illustrated. It is shown that considerable prior information is obtained from the theory of consumer choice when it is applied to this set of functional forms for demand equations.