1 Chapter Five Estimating GFT Demand Systems Robert L. Basmann, Kathy Hayes, Michael McAleer, Ian McCarthy and Daniel Slottje Abstract This chapter presents an exposition of Basmann’s Generalized Fechner-Thurstone (“GFT”) direct utility function and subsequently provides estimates of demand and income elasticities from this very useful “variable preference” demand system using household consumer survey data to explore what impact, if any, household size, income levels and other soci-economic variables have on consumer preferences. JEL Classification: D11, D12, C31, C33. Key words: Demand functions, variable preference, estimating demand systems,