Abstract
Theoretical models of industrial profitability have included the price clasticity of demand among the structural elements that explain profitability. Empirical studies have accounted for variations in demand characteristics across industries by sample partition or use of broadly defined dummy variables. Variations in demand characteristics across industries can be modeled directly, by including among the variables that explain industrial profitability the share of industry sales going to different classes of consumers, for example, final consumer demand and different segments of the public sector. In empirical tests, inclusion of such demand share variables improves the explanatory power of the model, especially for consumer goods industries.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
