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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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  • Clements, Kenneth W., 2008. "Price elasticities of demand are minus one-half," Economics Letters, Elsevier, vol. 99(3), pages 490-493, June.
    • Handle: RePEc:eee:ecolet:v:99:y:2008:i:3:p:490-493
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    1. Substitutability and the Cost of Climate Mitigation Policy
      by noreply@blogger.com (David Stern) in Stochastic Trend on 2014-03-21 02:41:00

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