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Questions tagged [elasticity]

In economics, a measure of the sensitivity or responsiveness of a variable corresponding to a change in another variable. Common applications in empirical research include price or income elasticity of demand. For example, what is the percent change in quantity demanded for gasoline when price is increased by 1%?

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Using results of log-log regression for forecasting

If I have a regression in with logs taken of both sides to give the equation: $ln(y) = \beta_0 + \beta_1 ln(x)$ and need to calculate the expected change in $y$ for a given $x$. I can see from reading ...
Paranoid Android's user avatar
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Derive elasticities from partial dependences

I am producing a partial dependences plot based on a random forests (RF) binary classification model, which yields predicted probabilty of observation $i$ belong to class A for the outcome variable Z. ...
Giacomo's user avatar
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log log model to estimate elasticities for 0 demand/dependent variable

Many of you will be familiar with the use of the log log linear regression model to estimate elasticity. I am in this situation where I can get zero demand, the dependent variable, which obviously ...
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Multiplicative BIASES in Log-Log regression

When we try to estimate elasticities by regression, we usually estimate the following regression model: $$ln(y) = \beta_0 + \beta_1 ln(x_1) + \dots + \epsilon$$ When we expect to have endogenous ...
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Moving average vs. lagged dependent variable in pass-through regressions

I am estimating a pass-through elasticity of the basic form: ln(cost) = alpha + ln(price) + controls + error My issue is that the price charged in period t may be associated with a product purchased ...
Kyle Carlin's user avatar
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interpretation of loglog regression

It is common econometric disciplines to model an baseline + incremental quantity due to treatment. E.g baseline sales + incremental sales(due to marketing). It is common to deploy loglog models to ...
pete lewis's user avatar
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How to get price- and cross-price elasticities using household survey data

How does one estimate price-elasticity and cross-price elasticity using cross-sectional household survey data? Note that household survey data usually do not include price information. The literature ...
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Elasticity estimates for zero-truncated negative binomial part in the hurdle model

I estimated a hurdle negative binomial regression model with zero-truncated negative binomial model as the count component in R using the pscl package. I wish to present elasticities for the count ...
Subid's user avatar
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Interpretation of results of a regression analysis

Here're the results of a multi-variable regression analysis run by Stata to test the effects of the three factors on the price elasticity of supply, which is the dependent variable. The coefficients ...
Joanna's user avatar
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pooled cross section data

I want to find input demand elasticities using a cost function. Input quantities and input prices are available for individual farmers for 5 food crops and 5 years (2015-2019). But farmers may vary ...
Jevon's user avatar
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How can I estimate differences between groups with pseudo-panel data?

I am working with pseudo-panel data (UK Cost of Living and Food Survey), which means I am observing expenditure data for different households every month over ~10 years with data on demographic ...
steinchen's user avatar
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"Inverting back" the inverted supply equation in an ECM. Possible?

I am estimating a time series 2SLS, ECM model, for electricity consumption. The system has a demand equation: The price is endogenous in the demand equation, and therefore, I also estimate a price ...
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Price elasticity of demand estimation with single store level data

I have weekly data per single SKU and for more than 500 point of sales. Data embeds base price, quanity sold, holidays, temperature, market activities (cut-price, display, leaflets) and so on. I want ...
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ECM long-run elasticity with one I(2) variable

I am estimating a 2SLS using a time series simultaneous equation ECM. The purpose is to estimate the price elasticity of electricity demand. Assume that both price and demand are I(1) variables, ...
KjetilH's user avatar
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Power demand Curves

Which is the correct way to compute the elasticity in this log log regression? Context: When having an log log regresion: log(Y) = log(B0) + B1 log(X), being Y= Demand and X Price, B0 intercept and B1 ...
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How do we make predictions for future data when you have lagged dependent features used in training?

I am executing a lightGBM model to forecast my units sold (qty) over a period of time. Objective is to run a model for each product group and be able to capture the trends, price elasticity, etc and ...
Siddhartha Srivastava's user avatar
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Should I use regularization in a price elasticity model?

I am building a price elasticity model using linear regression: log(demand) ~ 1 + log(price) + ... Does it make sense to use L1 and/or L2 regularization to prevent ...
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Accuracy of coefficients on log-linear regressiosn

Consider the following two regression models using data from the table below. $ln(wage)=\beta_0+\beta_1 female+u$ $ln(wage)=\gamma _0+\gamma_1 male+v$ wage female male 10 1 0 20 1 0 30 1 0 40 1 ...
mrhumanzee's user avatar
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Elasticity Panel Data

I have a dataset like this: Fileds Profit x Product: It is the variable that I can change, and is the independent variable. ...
Francisco Gonzalez's user avatar
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Finding Elasticity of Discount with Consumers

I was wondering what the best method to go about this would be. I have one year's worth of data and its related to air-travel. So I have ticket fares, passengers sent, discount applied on each ticket ...
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How do I interpret price elasticity when using state specific dummies and price, dummy interaction

I have price volume data for 3 states for which I want to calculate price elasticity for each state. The model has the following setup: $$ \ln(Y)=A_1+ A_2\ln(P) +A_3D_1 +A_4D_2+ A_5\ln(P)D_1 +A_6\ln(P)...
Sim's user avatar
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Modeling decreasing price elasticity of a good

I am attempting to model the decreasing price elasticity/response for a good. I need to control for place and time features and available alternatives. Besides this, I also need to add time and ...
kms's user avatar
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Elasticity of a 0-1-2 dummy variable in a log-log model

We know from the following sources, "Halvorsen, R. and Palmquist, P., The Interpretation of Dummy Variables in Semilogarithmic Equations, American Economic Review, Vol. 70, 1980, pp. 474-475.&...
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xgboost demand model with a smooth effect for the price variable

Question The question is: how to smooth out kinks in individual demand curves in a GBDT model without underfitting on the price variable? Background We have some GBDTs demand models already in place (...
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How to setup data properly for regression analysis to calculate price elasticity?

I am working on a project to try understand Linear Regression a bit deeper (they say experimenting is key and getting lost is part of the process) :( In this project, let's assume I have a watch shop. ...
umm's user avatar
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If 1% increase in X = .28% decrease in Y, does a 1% decrease in X = a .28% increase in Y?

I performed a log-log regression and have a negative regression coefficient. I'm interpreting my results to indicate that a 1% increase in X is associated with a .28% decrease in Y. However, for ...
Paaaand's user avatar
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290 views

constant model elasticity demand

I need to be corrected if i have something wrong : the elasticity of the demand is calculated : dq/dp if q is the quantity and p the price so to calculate it i take two prices p1 and p2, if i have ...
user3379546's user avatar
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Log-Log regression not giving me elasticity [duplicate]

Ive got a regression in the form log(y) = a +b1x1 + b2x1^2 + b3x2 + b4x3 + b5* log(x4). I've interpreted my coefficients as they should be interpreted.I figured out the quadratic and e^b3 and e^b4 are ...
user306393's user avatar
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1 answer
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Interpreting coefficients in log-log model with dummy for elasticity

I'm running an analysis of two products, X and Y, and I'm particularly interested in understanding the elasticities. However, I'm struggling to interpret the results. I'm using a log-log model, and in ...
Cass's user avatar
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Market Mix Modeling using Random Forest

I am trying to build a random forest-based market mix model, wherein I want to calculate the contribution of each of my X variables towards the target. Typical MMM problem statement, but here am not ...
Siddharth Dixit's user avatar
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1 answer
478 views

Elasticity of negative binomial regression?

How to find the elasticity of a negative binomial regression when the independent variables are numeric, categorical, or dummy variables? Edit: For example, ...
sophie's user avatar
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1 answer
259 views

Price optimization algorithms

I am working on an price optimization problem for a Real Estate company. Basically, we'd like to optimize their rental price to maximize revenue on their properties. I have submarket level data such ...
kms's user avatar
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Price elasticity: The comnment in the solution is not correct?

The comment in the solution says : We display all elasticities of purchase probability on the same plot. We observe that the Career-focused segment are the least elastic when compared to the rest. So, ...
Alex K's user avatar
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how to model price elasticity

I'm trying to model price elasticity based on price changes and I'm wondering what is the best way to do it. My data is at at the individual customer level and there's a 0/1 indicator for whether they ...
semidevil's user avatar
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Finding elasticity coefficients dummy variables

Lnyt=3.493+0.231xt-0.13Dtxt+1.024D2-0.541D3+t The data is quarterly and D2 and D3 are significant seasonal dummy variables I included. Additionally, Dtxt is the slope interaction dummy ...
azzarooni's user avatar
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2 answers
525 views

When using OLS on $\ln(y) = \beta_1 \ln(x) + \epsilon$, is $\beta_1$ the elasticity of $E[y\vert x]$, or the $y$ in the data (or both)?

Specifically, suppose we are estimating $$ \ln(y)=\beta_1\ln(x) + \epsilon $$ I understand that $\beta_1 = \frac{\partial \ln(y)}{\partial \ln(x)}$ which is the elasticity of $y$ with respect to $x$ ...
user106860's user avatar
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115 views

ARMA(-X) model with exogenous covariates interpretation

Let us assume that $Y_t$ can be described with an ARMAX process, including an exogenous covariate $X_t$, of the following form: \begin{equation} log(Y_t)=\phi_1log(Y_{t-1})+\phi_{12}log(Y_{t-12})+\...
Mxml's user avatar
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Regression Elasticities in multiple regression with continuous and dummy variables

So let's say I have a multiple regression as such: Y = constant + a1X1 + a2X2 + a3X3 Here ac is the coeffcient corresponding to the Xc Y is a normal variable constant is a non-zero constant X1 is ...
Xcessivesmash's user avatar
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197 views

Relating Two Derivatives (and Elasticities) of a Log-Log Regression

Consider a standard "log-log" linear regression model like this: $\log(y_i) = \log(a_i + b_i)\delta + \epsilon_i$, where $y$ is the dependent variable, $a$ and $b$ are two independent variables, and ...
km5041's user avatar
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Data level aggregation for price elasticity

I have just started working on price elasticity and I have some fundamental question. Question 1: I have daily price and sales data for a product, now if I want to calculate the price elasticity ...
Brohn's user avatar
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1 answer
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How to interpret the result from local sensitivity analysis?

I am currently doing local sensitivity analysis on a model that has 40 input parameters. I varied the base case value by 10% within the range of [-1, 1]. While doing so the average change (here, I ...
tropicalbath 's user avatar
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Price elasticity for n data points

So let's say I have 100 data points which contains the price and sales of a product. Just to start I assume that the relationship is of the form Q = a - b*P where P ...
Brohn's user avatar
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Different price elasticity results

According to this article, calculating elasticity of demand for different models is: I generate data for 5% reduction in prices with a corresponding 10% increasing in sales: price elasticity = (+10%/-...
Edvardoss 's user avatar
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Modelling dynamic price elasticity with bsts [closed]

I have approximately 2000 daily data which contains total daily sales and median price of sales for a particular product. I read the paper but the level of bayseian math is too high for me but from ...
thulungair's user avatar
2 votes
1 answer
3k views

How to interpret interaction in Log Log models

I have the following model, and I am not sure how to interpret the elasticity of the interaction term (log-log coefficients): Log(member) = 3.61 + 0.52 Log(Poor) - 0.26 Log(Sick) + 0.04 (Log(poor) * ...
Altijani Hussin's user avatar
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265 views

Elasticity Value for Log-Log and Level-Level Model

For a data if I calculate Elasticity using 1) log-log model with Elasticity = Beta and 2) Calculate elasticity in Level-Level Model with elasticity = beta *(X/Y) should the resultant value of ...
Swathy Krishnan's user avatar
1 vote
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218 views

Price elasticity vs Discount Elasticity

I have a case where I do not have many regular prices, but I have many discounts (different kind) which last a different number of days. Is there something like discount elasticity and how to adjust ...
ds_fan's user avatar
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Price Elasticity model for products with volume based pricing

I have few product categories eg prod1 prod2. Each category have similar products. So prod1 has 3 similar products with slight difference in features and prod2 has 5 products with slight differences. ...
user3380692's user avatar
1 vote
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369 views

Log-log regression where variables are in terms of growth rate

I would like to estimate elasticity of exchange rate on export. The specification takes the following form: $$Exp=\alpha+\beta_0REER+\beta_1GDP^{p}+\epsilon$$ where, $Exp$ is export growth calculated ...
David's user avatar
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1 answer
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Estimating elasticity using different regression models

My question is how to estimate elasticity based on a Probit model. I know the following formulas are used to estimate elasticity based on OLS (1) and logit (2) models (Ewing & Cervero, 2001): (1)...
Armin Yeganeh's user avatar