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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.

Suggested Citation

  • 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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    Cited by:

    1. 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.
    2. Carling, Kenneth & Håkansson, Johan & Meng, Xiangli & Rudholm, Niklas, 2015. "The effects of taxing truck distance on CO2 emissions from transports in retailing," HUI Working Papers 111, HUI Research.
    3. Clements, Kenneth W., 2008. "Price elasticities of demand are minus one-half," Economics Letters, Elsevier, vol. 99(3), pages 490-493, June.
    4. Clements, Kenneth W. & Gao, Grace, 2015. "The Rotterdam demand model half a century on," Economic Modelling, Elsevier, vol. 49(C), pages 91-103.
    5. Yingying Lu & David I. Stern, 2016. "Substitutability and the Cost of Climate Mitigation Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 81-107.
    6. Lars-H. R. Siemers, 2014. "A General Microsimulation Model for the EU VAT with a specific Application to Germany," International Journal of Microsimulation, International Microsimulation Association, vol. 7(2), pages 40-93.
    7. Adam J. Davis & Karl R. Geisler & Mark W. Nichols, 2016. "The price elasticity of marijuana demand: evidence from crowd-sourced transaction data," Empirical Economics, Springer, vol. 50(4), pages 1171-1192, June.
    8. Snow, Arthur & Warren, Ronald S., 2015. "Pigou’s Law and the proportionality of income and price elasticities of demand," Economics Letters, Elsevier, vol. 132(C), pages 136-138.
    9. Lu, Yingying & Liu, Yu & Zhou, Meifang, 2017. "Rebound effect of improved energy efficiency for different energy types: A general equilibrium analysis for China," Energy Economics, Elsevier, vol. 62(C), pages 248-256.
    10. 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.
    11. Jon Nelson, 2013. "Meta-analysis of alcohol price and income elasticities – with corrections for publication bias," Health Economics Review, Springer, vol. 3(1), pages 1-10, December.
    12. Kurt Kratena, 2010. "International outsourcing and the demand for skills," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 37(1), pages 65-85, February.
    13. Carling, Kenneth & Håkansson, Johan & Meng, Xiangli & Rudholm, Niklas, 2017. "The effect on CO2 emissions of taxing truck distance in retail transports," Transportation Research Part A: Policy and Practice, Elsevier, vol. 97(C), pages 47-54.
    14. Brand, Christian & Tran, Martino & Anable, Jillian, 2012. "The UK transport carbon model: An integrated life cycle approach to explore low carbon futures," Energy Policy, Elsevier, vol. 41(C), pages 107-124.
    15. Saari, M. Yusof & Dietzenbacher, Erik & Los, Bart, 2016. "The impacts of petroleum price fluctuations on income distribution across ethnic groups in Malaysia," Ecological Economics, Elsevier, vol. 130(C), pages 25-36.

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