Abstract
Summary In this paper, we have examined the basic theory of utility maximisation and its use in the generation of demand systems which significantly reduce the parameter space within which the researcher must work. For a specific utility representation we show how a particularly popular demand system known as the linear expenditure system (LES) is derived and proceed to examine a generalisation known as the S‐branch system. This S‐branch system has been used by Kraft and Kraft4 in the analysis of intercity travel with some success and may lead to further analysis of travel demand using complete demand systems. However, the restrictions on parameter estimates yielded by demand systems based on additive preferences (as is the LES and its variants) may lead one to reject this approach in favour of an a priori approach to demand function specification. If this is the case, recent work on generalised functional form based on the early developments of Box and Cox is suggested as being possibly quite useful. We ...
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