A Pedagogical Note on Price Elasticity of Demand

概要

論文の詳細を見る
The purpose of this paper is to resolve the disparate and confounding claims often found in microeconomics textbooks on the values of price elasticity of demand. Some textbooks claim that the budgetary share of a commodity can affect price elasticity of demand while others warn against assigning any significant role to the budgetary share in the determination of price elasticity the of demand. We probe into the theoretical underpinnings of the demand function and identify the three determinants-compensated price elasticity, income elasticity, and budgetary share-that make up price elasticity of demand. By so doing, we are able to address and explicate the perplexing issue in a manner fully consistent with the notion of price elasticity of demand ; we also provide a more plausible economic interpretation of the different price-elasticities of demand for food across countries and higher price-elasticity of demand for cigarettes among college students in the U.S.
青森公立大学の論文
1998-12-15