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Price elasticities of demand are minus one-half

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  • Clements, Kenneth W.

Abstract

As an empirical regularity for broad groups, price elasticities of demand are scattered around minus one-half, a result not inconsistent with preference independence. When nothing is known about the price-sensitivity of a good, a reasonable first approximation to its price elasticity is minus one-half.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 99 (2008)
Issue (Month): 3 (June)
Pages: 490-493

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Handle: RePEc:eee:ecolet:v:99:y:2008:i:3:p:490-493

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Web page: http://www.elsevier.com/locate/ecolet

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References

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  1. Kenneth Clements, 2006. "Price Elasticities of Demand Are Minus One-half," Economics Discussion / Working Papers 06-14, The University of Western Australia, Department of Economics.
  2. Izan, Haji Y. & Clements, Kenneth W., 1979. "A cross-cross-section analysis of consumption patterns," Economics Letters, Elsevier, vol. 4(1), pages 83-86.
  3. Selvanathan, Saroja, 1987. "A Monte Carlo test of preference independence," Economics Letters, Elsevier, vol. 25(3), pages 259-261.
  4. Espey, Molly, 1998. "Gasoline demand revisited: an international meta-analysis of elasticities," Energy Economics, Elsevier, vol. 20(3), pages 273-295, June.
  5. Saroja Selvanathan & E. A. Selvanathan, 2005. "Is utility additive? Further evidence," Applied Economics, Taylor & Francis Journals, vol. 37(1), pages 83-86.
  6. Powell, Alan A., 1992. "Sato's insight on the relationship between the Frisch 'parameter' and the average elasticity of substitution," Economics Letters, Elsevier, vol. 40(2), pages 173-175, October.
  7. Molly Espey, 1996. "Explaining the Variation in Elasticity Estimates of Gasoline Demand in the United States: A Meta-Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 49-60.
  8. Clements, Kenneth W & Selvanathan, Antony & Selvanathan, Saroja, 1996. "Applied Demand Analysis: A Survey," The Economic Record, The Economic Society of Australia, vol. 72(216), pages 63-81, March.
  9. Barten, Anton P, 1977. "The Systems of Consumer Demand Functions Approach: A Review," Econometrica, Econometric Society, vol. 45(1), pages 23-51, January.
  10. Espey, James A. & Espey, Molly, 2004. "Turning on the Lights: A Meta-Analysis of Residential Electricity Demand Elasticities," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 36(01), April.
  11. Frank J. Chaloupka & Michael Grossman & Warren K. Bickel & Henry Saffer, 1999. "The Economic Analysis of Substance Use and Abuse: An Integration of Econometrics and Behavioral Economic Research," NBER Books, National Bureau of Economic Research, Inc, number chal99-1, July.
  12. Jasper M. Dalhuisen & Raymond J. G. M. Florax & JHenri L. F. de Groot & Peter Nijkamp, 2003. "Price and Income Elasticities of Residential Water Demand: A Meta-Analysis," Land Economics, University of Wisconsin Press, vol. 79(2), pages 292-308.
  13. Craig A. Gallet & John A. List, 2003. "Cigarette demand: a meta-analysis of elasticities," Health Economics, John Wiley & Sons, Ltd., vol. 12(10), pages 821-835.
  14. Brown, Alan & Deaton, Angus S, 1972. "Surveys in Applied Economics: Models of Consumer Behaviour," Economic Journal, Royal Economic Society, vol. 82(328), pages 1145-1236, December.
  15. Kenneth Clements & Wana Yang & Simon Zheng, 1997. "Is utility additive? The case of alcohol," Applied Economics, Taylor & Francis Journals, vol. 29(9), pages 1163-1167.
  16. Deaton, Angus, 1974. "A Reconsideration of the Empirical Implications of Additive Preferences," Economic Journal, Royal Economic Society, vol. 84(334), pages 338-48, June.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Substitutability and the Cost of Climate Mitigation Policy
    by noreply@blogger.com (David Stern) in Stochastic Trend on 2014-03-20 21:41:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. World Bank, 2011. "A New Slant on Slopes : Measuring the Benefits of Increased Electricity Access in Developing Countries," World Bank Other Operational Studies 2742, The World Bank.
  2. Yingying Lu & David I. Stern, 2014. "Substitutability and the Cost of Climate Mitigation Policy," CAMA Working Papers 2014-28, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  3. Kenneth Clements, 2006. "Price Elasticities of Demand Are Minus One-half," Economics Discussion / Working Papers 06-14, The University of Western Australia, Department of Economics.
  4. Kurt Kratena, 2010. "International outsourcing and the demand for skills," Empirica, Springer, vol. 37(1), pages 65-85, February.
  5. 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.

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