A linear model of the demand for oil is derived from a cost minimisation problem in which demand depends on the price of oil, the price of coal and output. The model is estimated and tested against a log-linear model. The empirical results reject the log-linear specification and show that the...

A linear model of the demand for oil is derived from a cost minimisation problem in which demand depends on the price of oil, the price of coal and output. The model is estimated and tested against a log-linear model. The empirical results reject the log-linear specification and show that the...

If budget shares have stochastic trend or seasonality or both, then demand equations based on the assumption of deterministic trend and deterministic seasonality will be mis-specified. We test this proposition by estimating a Linearized Almost Ideal (LAI) demand system for meat demand in the...