The economics of bauxite and aluminium: Distributed lags and new econometric estimates

Bauxite supply and demand equations for the largest producers and consumers are estimated with 1958–1982 data. In specifications that include industrial activity indexes, substitute prices and energy costs, these regressors improve the fits and are statistically significant. The own price variable, the Koyck-Nerlove lagged dependent variable, or both, become insignificant, or their estimated coefficients are substantially altered, in relation to their values in price-only models, which overestimate the own price impact and the gap between long- and short-term effects. Industrial activity is the main determinant, followed by the other new regressors. The Jamaican response to price is perverse and significant.