Cross-price Elasticities Of Demand Research Articles

A Translog Cost Analysis of Turkey Production in the Mid-Atlantic Region

AbstractThe production structure of 165-hen and 200-tom turkey flocks is investigated using a translog (dual) variable cost function. The partial static equilibrium elasticities of scale, input demand, input substitution, and cross price elasticities of demand are calculated. The elasticity of scale is found to be not significantly different from one over the range of 5,900 to 9,822 birds for the hen flocks and over the range of 7,765 to 11,043 birds for the torn flocks. In general, the input demand elasticities are inelastic with the exception of the input fuel. The cross-price elasticities are in general inelastic.

Estimation of aggregate demand elasticities for paper and paperboard in Japan

Demand equations for paper and paperboard produced by and imported into Japan have been developed. From estimates of the income and cross price elasticities of demand it is concluded that the marke...

PRICE DISCRIMINATION IN RELATED MARKETS

The Pigou-Robinson pricing rule for third degree monopolistic price discrimination states that price ratios vary inversely with ratios of direct price elasticities of demand. The rule holds when markets are sealed, and cross price elasticities of demand are zero. We show how the rule can fail when imperfect sealing permits leakage. We also develop a general discriminatory pricing rule that holds when leakage causes market demands to be related. The general pricing rule is based on all direct price elasticities of demand, all cross price elasticities of demand, and the size distribution of the markets

Transmission of external price disturbances and the composition of trade

This paper focuses on the role of trade composition in the transmission of external price disturbances. It is shown that the effects of an increase in the price of imports on domestic prices and the trade balance crucially depend on the cross price elasticity of demand in the case of final goods and the elasticity of substitution between factors in the case of intermediate goods. In the case of an input such as oil, where the elasticity of substitution between imported and domestic factors of production is less than unity, an increase in its price will give rise to a balance-of-trade deficit but will have ambiguous effects on domestic prices.

Price elasticity of commuter mode choice: Effect of a 20 per cent rail fare reduction

There have been very few studies undertaken on the comparative levels of price elasticities of travel demand derived from before-after data and cross sectional demand models. A 20% fare reduction in Sydney (Australia) in 1976 provided a suitable opportunity to undertake such a comparison. Furthermore the influence of misperception of actual fare changes and the role of other non-cost factors were investigated so as to determine the true impact of the fare reduction on travel demand. After allowing for captive rail-travellers, the cross price elasticity of demand is 0.14, adding further support to the limited impact of fare changes on levels of public transport patronage.

The demand for higher education facing an individual institution

The purpose of this paper is to provide an estimate of the elasticity and cros-selasticities of demand for higher education facing an individual institution. The utility which a high school graduate derives from each educational option open to him is assumed to be a stochastic function of the attributes of that option. For certain types of utility functions the maximization of utility results in the logit probability model. This model is used to analyze the choices made by a sample of high school graduates in Hawaii. Estimates of the price elasticity and the cross-price elasticities of demand for enrollment at the University of Hawaii are obtained. It is found that the demand is quite inelastic with respect to both tuition and total cost of education. These estimates imply that changes in tuition will not affect enrollment appreciably.

ETA: A Model for Energy Technology Assessment

This article explores some of the options by which the U.S. could move away from its present heavy dependence upon oil and gas toward a more diversified energy economy. Through nonlinear programming, our model incorporates both own- and cross-price elasticities of demand. In this way, it allows for price-induced interfuel substitution and energy conservation. Among the supply options studied are: direct combustion of coal to generate electricity; conversion of coal to synthetic fuels; nuclear energy--first from the light water reactor and later from the fast breeder; hydrogen via electrolysis; and distant future technical options such as fusion and central station solar power (aggregated and described only as an advanced technology). Each energy source has its own cost parameters and introduction date, but is interdependent with other components of the energy sector. For example, the amount of coal consumed in electric power plants can affect the marginal cost of production--and hence the cost of coal-based synthetic fuels for nonelectric energy. The converse is also true. Thus, it is not sufficient to look at individual technologies in isolation. We must attempt to compare their effects upon the system as a whole.

THE SHORT‐RUN IMPACT OF BEEF IMPORTS ON U.S. MEAT PRICES

This paper contains short‐run estimates of the impact of beef imports from Australia and elsewhere on U.S. retail meat prices. The U.S. beef demand is separated into two categories, table cuts and processed items. Estimates of direct and cross price elasticities of demand for these products are used together with elasticity estimates for other meats and other foods to assess the effect of imports on prices and upon various portions of the Consumer Price Index.

The Labor Market for Engineers: An Alternative Methodology

The labor market for engineers is analyzed by constructing and estimating separate demand and supply schedules. Both ordinary least squares and two-stage least squares are employed. Estimated cross-price elasticities of demand are used as a measure of the complementarity or substitutability of engineers and other factor inputs. The following conclusions emerge: The relative wage elasticity of demand is not a significant determinant of engineering employment though, with minor exception, research and development expenditures are. The supply of engineers tends to be responsive to absolute wage differences. Related occupations requiring less formal training than engineers tend to be complements rather than substitutes.