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%?

Filter by
Sorted by
Tagged with
0
votes
0answers
9 views

Elasticity estimates with Tobit using margins command in State 12

I am running a tobit regression to model education expenditures (zero for some households) and tried using margins, eydx(*) to obtain the elasticity estimates, but ...
1
vote
0answers
42 views

Is a decreasing and assymptotic (for y=const) convex function always logarithmically convex? [migrated]

In short, I have a function p(x) which is defined for x>=0. The function is convex, decreasing and assymptotically approaches 0 for $x\rightarrow\infty$ . I need to know if $p''p>=(p')^2$ . As ...
0
votes
0answers
14 views

Estimating sparse price elasticities in large data set

I am working with a data set that contains daily sales data for 500 different products over multiple years. My objective is to estimate the volume of each product that would be sold in the future if I ...
1
vote
0answers
16 views

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 ...
1
vote
0answers
15 views

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 ...
3
votes
2answers
79 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 $x$ ...
0
votes
0answers
14 views

$\ln(y)_{ij} = \beta_1 \ln(x_1)_{ij} + \beta_2 \ln(x_2)_{ij} + \epsilon$ for censored data, what would be the elasticity of $y$ w.r.t $x_1$?

Suppose we wish to estimate $$ ln(y)_{ij} = \beta_1ln(x_1)_{ij} + \beta_2 ln(x_2)_{ij} + \epsilon $$ If the data was not censored, then the elasticity of $y$ w.r.t $x_1$ would be $\beta_1$. However, ...
1
vote
0answers
36 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})+\...
1
vote
0answers
30 views

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 ...
1
vote
0answers
46 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 ...
0
votes
0answers
15 views

Estimating demand elasticity, regression design, statistical tests and sample size

Statistics, Econometrics: Hello everyone, I need an important piece of advice in connection with a data-related issue - especially to the economists and statistics/econometrics affine among you. I ...
0
votes
1answer
39 views

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 ...
1
vote
1answer
53 views

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 ...
0
votes
0answers
24 views

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 ...
0
votes
0answers
22 views

Pricing model evaluation criteria

Let's say there are multiple pricing algorithms which have been developed to predict the optimal price of a product in a market. Now the store wants to launch one of these pricing strategy in the ...
0
votes
1answer
139 views

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%/-...
2
votes
0answers
67 views

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 ...
1
vote
1answer
485 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) * ...
0
votes
0answers
57 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 ...
1
vote
0answers
77 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 ...
1
vote
0answers
84 views

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. ...
1
vote
0answers
117 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 ...
1
vote
1answer
162 views

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)...
2
votes
1answer
694 views

In R, How can I calculate the elasticity of Y with respect to X, when Y is binary?

I have a dataset that I am doing in R and I need to calculate elasticities in it. To simplify my model, I have Y = XB + u, and I need to find the elasticity of Y with respect to X. My investigation ...
1
vote
0answers
373 views

Price Elasticity Estimation with a non-linear price schedule

How do I estimate price elasticity in a non-linear price setting? Non-linear prices are seen in utilities (electricity, water etc.) where the price per unit is determined by quantity purchased. So a ...
0
votes
0answers
1k views

Price elasticity in logistic regression with log price

I'm estimating demand and calculating price elasticity using logistic regression. In logistic regression with level price, elasticity is $$ \alpha*price*(1-share)$$ while if one uses log of price, ...
0
votes
0answers
680 views

Price elasticity for mortgages

this is my first question and I hope I get everything right. The problem I have to solve is the following: a bank is offering its customers "pre-validated" mortgages of up to a certain amount (for ...
1
vote
0answers
23 views

rough elasticity estimates of homogeneous products

Let us say I am using a log log model to estimate the own price elasticity of a product given the unit demand data for different prices. I think this is acceptable as it is done by many practicioners. ...
0
votes
1answer
3k views

Calculate price elasticity from a history of sales data

I'm looking at sales data with sales at different prices over time, I can't figure out a good approach to getting the: 'If we increase our prices by 1% how much will our demand change by? ' the data ...
0
votes
1answer
34 views

Interpretation - after transforming slope to elasticity

Basically, my question is, after I transform the slope into elasticity by using the standard formula How do I interpret the number I get? Say, I got -0.21. Should I interpret it as -0.21%, or -20% ?...
0
votes
2answers
259 views

How can I approximate the standard error for an elasticity with limited information?

I want to estimate/approximate the standard error of an elasticity of Y with respect to X: (dy/dx)*(x/y) Let's say I have the following data: The mean of Y and its standard deviation The mean of X ...
0
votes
0answers
534 views

Obtain elasticity from model predictions

Say we have estimated a model: demand = a + b * price; where b represents the estimated point elasticity (assuming a log-log model). Can we use this model to predict the demand in a new scenario ...
1
vote
0answers
35 views

Extrapolate historical elasticities

Suppose I have: Point estimates of price elasticity of demand for a given good Point estimates of income elasticity of demand for a given good Point estimates of output for a given good Point ...
1
vote
1answer
530 views

Can I use cross elasticity of demand for time series data?

I would like to determine, whether two products are complementary. I have one year of data (day by day), where I have prices and demands for both products. Can I use cross elasticity of demand? I ...
1
vote
1answer
4k views

price elasticity and time series modelling

Formulas like this taken from here: ...
0
votes
0answers
44 views

modeling demand/elasticity for products with potential/occasional zero demand

Looking at the methodology which uses this log model: $Log{Demand_A} = \beta_0+ \beta_1logPrice_A + \beta_2logPrice_B + \beta_3Promo_1 + \beta_4Promo_2 + \beta_5logPrice_A*Promo_1 + \beta_6*...
2
votes
0answers
173 views

Are regression estimates still reliable despite heteroscedasticity and non-normality

I am performing a simple linear regression with the lm() function to make statements about the association between the two variables. But I am not sure if my ...
2
votes
0answers
197 views

own and cross elasticity for many products

This publication uses this formula to fit a model to predict the demand of a product A: ...
1
vote
0answers
139 views

Computing arc elasticity for categorical variables

I want to compute arc elasticity for a categorical variable that has more than 2 categories. In fact, I have estimated a multinomial logit model of mode choice and have included street type as a ...
1
vote
2answers
4k views

Interpret eydx, eyex in margins, Stata

Suppose the regression is y=beta_0+beta_1*x + epsilon. I obtain the eydx=.295 by magins eydx(x) command. What does Stata really do? Does Stata actually regress <...
1
vote
1answer
725 views

Log-log elasticities estimation

A simple linear regression model is given by $$\log(q)=b_1+b_2\log(p)+e$$ In this model $b_2$ is the derivative of $\log(p)$ with respect to $\log(p)$, that is, $$b_2=\frac{d \log(q)}{d \log(p)}=\...
4
votes
1answer
233 views

Name for “probability density elasticity” property?

For standard normal Z, the change in probability density associated with equally sized changes in z is obviously greater for values of z that are further away from the mean/mode. For example, if z=0,...
1
vote
1answer
2k views

Elasticities for Multinomial Logit Model (Stata)

I estimat a multinomial logit model in Stata. Is it possible to compute elasticities from the MLogit model? If so, do I need to take the logarithm of the y and x variable, or only the log of x? I ask ...
0
votes
2answers
1k views

Lagging/Leading Indicator Length Time

I tried looking this question up on google and didn't find material that answered my question. But my questions are: (1) Is there a method to determine how long it takes a leading indicator to ...
1
vote
0answers
105 views

Estimating elasticity of $y$ with respect to $x$ in a log-log specification

My rudimentary workings so far is that; $\log(y_i/x_i) = \log(y_i)-\log(x_i)$ Factorise, so, $\log(y_i/x_i) = \log(y_i) + \upsilon_i - \log(\gamma_i + 1)$ Thus, elasticity of $y$ to $x$ is always $...
3
votes
1answer
833 views

Price Elasticity Calculation

I have a question concerning price elasticity calculation. Let us say that I have 26 points in time where for each one I have recorderd price $P_t$ and demand $D_t$ for a product. One way to ...
1
vote
1answer
3k views

Understanding the price elasticity interaction in a regression model

The question that follows is derived from a SAS User's Group paper available on the web (Price and Cross Price Elasticity Estimation Using SAS). The objective is to calculate price elasticities (own ...
2
votes
0answers
272 views

Explanation for negative cross-price elasticities if the two alternatives cannot be complements

I would like some help in interpreting some odd cross-price elasticities that I got from my model. I estimated the following multinomial probit model and calculated the elasticities post-estimation: ...
1
vote
2answers
940 views

Instrumental variable identification for price elasticity

I am working on a price elasticity problem and i am using Log-Log linear model. Below are the set of variables Dependent variable: logarithm of my quantity sold (LogQ) Independent variable: ...
1
vote
2answers
2k views

Instrumental variables regression Vs Linear Regression for price elasticity

Based on comment here that What do "endogeneity" and "exogeneity" mean substantively? should we use linear regression or instrumental regression for price elasticity? As price and ...