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Confidence Intervals for Elasticities and Flexibilities from Linear Equations

Author

Listed:
  • Stephen E. Miller
  • Oral Capps
  • Gary J. Wells

Abstract

Information regarding the precision of elasticity and flexibility estimates from equations linear in original variables is typically missing from empirical studies. A result due to Fieller which allows construction of exact confidence intervals for elasticities and flexibilities from such equations is demonstrated. Exact confidence intervals are not necessarily narrowest at mean levels nor are they symmetric about the point estimates of the elasticities and flexibilities. Empirical examples indicate that exact 95 percent confidence intervals for price flexibilities for food items can be quite wide.

Suggested Citation

  • Stephen E. Miller & Oral Capps & Gary J. Wells, 1984. "Confidence Intervals for Elasticities and Flexibilities from Linear Equations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 392-396.
    • Handle: RePEc:oup:ajagec:v:66:y:1984:i:3:p:392-396.
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    File URL: http://hdl.handle.net/10.2307/1240807
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    1. Duffy, Patricia A. & Richardson, James W. & Wohlgenant, Michael K., 1987. "Regional Cotton Acreage Response," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 19(1), pages 1-11, July.
    2. Polson, Rudolph A. & Shumway, C. Richard, 1992. "Production Relationships In South Central Agriculture," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 24(2), pages 1-15, December.
    3. Ito, Shoichi & Grant, Warren R., 1987. "Rice In Asia: Is It Becoming An Inferior Good?," 1987 Annual Meeting, August 2-5, East Lansing, Michigan 270131, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Nadiia Davydenko & Natalia Wasilewska & Zoya Titenko & Mirosław Wasilewski, 2024. "Substantiation of the Risk Neutralization Mechanism in the Financial Security Management of Agricultural Enterprises," Sustainability, MDPI, vol. 16(3), pages 1-18, January.
    5. Shumway, C. Richard & Lim, Hongil, 1993. "Functional Form And U.S. Agricultural Production Elasticities," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(2), pages 1-11, December.
    6. Wells, Gary J. & Miller, Stephen E. & Thompson, C. Stassen, 1986. "Farm Level Demand For Pecans Reconsidered," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 18(1), pages 1-4, July.
    7. Pagoulatos Emilio & Sorensen Robert, 2017. "What Determines the Elasticity of Industry Demand?," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 15(2), pages 1-10, December.
    8. Dorfman, Jeffrey H. & Kling, Catherine L. & Sexton, Richard J., 1990. "Confidence Intervals for Elasticities and Flexibilities," 1990 Annual meeting, August 5-8, Vancouver, Canada 270866, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. James Binkley & James Eales & Mark Jekanowski & Ryan Dooley, 2001. "Competitive behavior of national brands: The case of orange juice," Agribusiness, John Wiley & Sons, Ltd., vol. 17(1), pages 139-160.
    10. J. G. Hirschberg, J. N. Lye & D. J. Slottje, 2008. "Confidence Intervals for Estimates of Elasticities," Department of Economics - Working Papers Series 1053, The University of Melbourne.
    11. Roberts, Roland K., 1986. "Plant Nutrient Demand Functions For Tennessee With Prices Of Jointly Applied Nutrients," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 18(2), pages 1-6, December.
    12. Ornelas, Fermin & Shumway, C. Richard, 1993. "Supply Response and Impact of Government-Supported Crops on the Texas Vegetable Industry," Agricultural and Resource Economics Review, Cambridge University Press, vol. 22(1), pages 27-36, April.
    13. R. Tiffin, 1991. "Production Choice In The England And Wales Dairy Sector," Journal of Agricultural Economics, Wiley Blackwell, vol. 42(3), pages 394-403, September.
    14. Shumway, C. Richard & Chesser, Rayanne R., 1994. "Pesticide Tax, Cropping Patterns, And Water Quality In South Central Texas," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 26(1), pages 1-17, July.
    15. Hirschberg, J.G. & Lye, J.N. & Slottje, D.J., 2008. "Inferential methods for elasticity estimates," Journal of Econometrics, Elsevier, vol. 147(2), pages 299-315, December.
    16. Lanfranco, Bruno A. & Ames, Glenn C.W. & Huang, Chung L., 2001. "A Censored System Estimation Of Hispanic Household Food Consumption Patterns," Faculty Series 16720, University of Georgia, Department of Agricultural and Applied Economics.
    17. Woods, Timothy A. & Marra, Michele C. & Leiby, James D., 1990. "Toward A Marketing Strategy For Fresh Wild Blueberries In The Northeast," Journal of Food Distribution Research, Food Distribution Research Society, vol. 21(2), pages 1-10, June.

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