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Demand and choice elasticities for a separable product group

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  • Smith, Brett
  • Abdoolakhan, Zeenat
  • Taplin, John

Abstract

Demand elasticities are derived from choice elasticities for a separable group of close substitutes. The example shows that choice and ordinary elasticities are similar for minor group members but radically different for the dominant member.

Suggested Citation

  • Smith, Brett & Abdoolakhan, Zeenat & Taplin, John, 2010. "Demand and choice elasticities for a separable product group," Economics Letters, Elsevier, vol. 108(2), pages 134-136, August.
    • Handle: RePEc:eee:ecolet:v:108:y:2010:i:2:p:134-136
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    References listed on IDEAS

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    1. Peter M. Guadagni & John D. C. Little, 2008. "A Logit Model of Brand Choice Calibrated on Scanner Data," Marketing Science, INFORMS, vol. 27(1), pages 29-48, 01-02.
    2. Robert A. Pollak, 1969. "Conditional Demand Functions and Consumption Theory," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 83(1), pages 60-78.
    3. Alain Carpentier & Hervé Guyomard, 2001. "Unconditional Elasticities in Two-Stage Demand Systems: An Approximate Solution," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(1), pages 222-229.
    4. Kremers, Hans & Nijkamp, Peter & Rietveld, Piet, 2002. "A meta-analysis of price elasticities of transport demand in a general equilibrium framework," Economic Modelling, Elsevier, vol. 19(3), pages 463-485, May.
    5. David L. Edgerton, 1997. "Weak Separability and the Estimation of Elasticities in Multistage Demand Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 62-79.
    6. Clements, Kenneth W., 2008. "Price elasticities of demand are minus one-half," Economics Letters, Elsevier, vol. 99(3), pages 490-493, June.
    7. Brons, Martijn & Nijkamp, Peter & Pels, Eric & Rietveld, Piet, 2008. "A meta-analysis of the price elasticity of gasoline demand. A SUR approach," Energy Economics, Elsevier, vol. 30(5), pages 2105-2122, September.
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    Cited by:

    1. INOSE Junya, 2016. "Loyalty and Consumption: A CES representation," Discussion papers 16058, Research Institute of Economy, Trade and Industry (RIETI).
    2. Truong, Truong P. & Hensher, David A., 2012. "Linking discrete choice to continuous demand within the framework of a computable general equilibrium model," Transportation Research Part B: Methodological, Elsevier, vol. 46(9), pages 1177-1201.

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    Keywords

    Demand Choice Elasticity;

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