Elasticity Of Demand Research Articles

Influence of price elasticity of demand on monopoly games under different returns to scale

Influence of price elasticity of demand on monopoly games under different returns to scale

Determinants of farm households’ organic rice consumption in Magelang

Determinants of farm households’ organic rice consumption in Magelang

Price formation without fuel costs: The interaction of demand elasticity with storage bidding

Price formation without fuel costs: The interaction of demand elasticity with storage bidding

Research on the influencing factors of inter provincial urban-rural residents' consumption upgrading in China

This article aims to explore the evolutionary characteristics and influencing factors of the consumption structure of urban and rural residents across prov-inces in China. Based on inter provincial consumption data of urban and rural residents, this article analyzes the demand elasticity of eight major categories of consumption among residents, and examines the impact of factors such as ur-banization rate and elderly dependency ratio on consumption upgrading. The study found that urbanization rate is a key factor driving the growth of con-sumption expenditure. This article provides empirical evidence for understand-ing the changes in the consumption structure of urban and rural residents in China, and provides reference for formulating relevant policies.

Demand side management with electric vehicles and optimal renewable resources integration under system uncertainties

The rapid growth of integrating electrical vehicles (EVs) into the distribution network has introduced complexities and power flow inefficiencies. To address these challenges, optimal renewable energy resources (RERs) integration along with applied demand-side management (DSM) contribute to managing load profiles and generation thus reducing costs. This should be smartly attained through selecting efficient optimization techniques to improve power quality, voltage profile, and reliability. This paper aims to investigate the effect of integrating EVs and applying peak load shifting (PLS) as a DSM strategy with the optimal allocation of distributed energy resources, specifically wind and photovoltaic (PV) systems, as distributed generators (DGs) on distribution networks. Taking into consideration the stochastic behavior of RERs, EVs demand elasticity of charging and discharging scenarios and load variance. The main objective of this work focuses on power loss reduction and implementing PLS to flatten the load profile and form a new loadability to reduce costs. The study is demonstrated on a typical IEEE 69-bus system, considering the load, EVs, and RERs profiles during weekdays in winter and summer seasons. The study examines the optimal size and location of combining two DGs (wind and PV), in addition to incorporating bidirectional plug-in hybrid electric vehicles into the system. The study utilizes the Zebra optimization algorithm (ZOA), in comparison with the Whale optimization algorithm (WOA), Grey wolf optimization algorithm (GWO), and Genetic algorithm (GA). The latter is employed only as a reference for comparison. For each season, the simulation is divided into two parts, each part consists of four cases. Part (1) is simulated assuming constant power integration for the RERs while part (2) considers their stochastic behavior. Also, optimal charging strategies for EVs are examined for cost-effectiveness during high penetration levels for the IEEE 123-bus system. The results demonstrated the effectiveness of the proposed algorithm in reducing power loss. Moreover, shifting peak hours flattens the load profile, thereby reducing costs and power loss across the distribution network. Furthermore, the performance of the ZOA dominates the WOA, GWO, and GA.

Motivating Green Transition: Analyzing Fuel Demands in Turkiye Amidst the Climate Crisis and Economic Impact

Decarbonizing the transportation sector is critical for sustainable development, particularly in rapidly urbanizing countries like Turkiye. This study analyzes fuel demand elasticities for diesel, gasoline, and LPG across 12 NUTS-1 regions of Turkiye in 2022, using a panel random effects SUR approach. The model accounts for regional variation and fuel interactions, producing robust estimates that uncover significant spatial and temporal differences in consumption patterns. Uniquely, diesel demand displays a significantly positive price elasticity, challenging the conventional assumption of inelasticity. Gasoline demand is moderately price-sensitive, while LPG appears relatively unresponsive. Strong cross-price elasticities—especially between diesel and gasoline—point to substitution effects that can inform more adaptive policy frameworks. Seasonal fluctuations and Istanbul’s outsized impact also shape national trends. These findings underscore the need for differentiated region- and fuel-specific strategies. While higher gasoline taxes may effectively reduce demand, lowering diesel and LPG use will require complementary measures such as infrastructure upgrades, behavioral incentives, and accelerated adoption of alternative fuels. The study advocates for regionally adjusted carbon pricing, removal of implicit subsidies, and targeted support for electric and hybrid vehicles. Aligning fiscal tools with actual demand behavior can enhance both the efficiency and equity of the transition to a low-carbon transportation system.

Price Elasticity of the Residential Water Demand in Latin America: Empirical Analysis for Chile, Colombia, and Peru

The Latin American region lacks information on residential water demand and its price elasticity, in contrast to the extensive literature available in developed countries. To address this gap, we estimate residential water demand and its price elasticity in Chile, Colombia, and Peru using a discrete-continuous choice (DCC) model that accommodates nonlinear increasing block tariff (IBT) structures. We utilize household-level datasets for Peru and Colombia and a large administrative panel in Chile. Our findings reveal that the price elasticity of water demand varies significantly across countries. Chile exhibits moderately inelastic demand ([Formula: see text] overall, [Formula: see text] during summer months), while Colombia lies in a mid-range ([Formula: see text]), and Peru shows greater price responsiveness ([Formula: see text]). Furthermore, we find variations within each country when we analyze different levels of observed consumption by households. Additionally, household characteristics such as size and income are important drivers for understanding consumption patterns. Our research highlights the need for tailored policies that account for local consumption behaviors and socio-economic factors to improve the effectiveness of block tariff systems, given that IBT holds relevance from a policy perspective. These findings contribute to the literature on water pricing in Latin America and provide evidence-based insights for policymakers.

Análisis del Consumo de Cigarrillo a través de la Elasticidad Precio, Periodo 2015-2023

This study evaluates the impact of price elasticity on cigarette consumption in Ecuador between 2015 and 2023, with the aim of analyzing how cigarette demand varies in response to price changes, considering the country's specific socio-economic and economic factors. The research employs a non-experimental, quantitative, and descriptive methodology, using the average formula to calculate the price elasticity of cigarette demand. The results indicate that the price elasticity is negative, showing an inverse relationship between price and quantity demanded: as cigarette prices increase, demand decreases, although in a relatively inelastic manner. In other words, the price increase reduces the quantity demanded by a smaller proportion than the price increase. This behavior is influenced by fiscal policies and the socio-economic characteristics of the Ecuadorian population. The study highlights the importance of considering the national context when designing fiscal policies aimed at reducing tobacco consumption. Price-elasticity-based policies can not only optimize tax collection but also contribute to improving public health. It is suggested that tax increases be gradual and that awareness campaigns, particularly targeted at vulnerable groups like the youth, be implemented to reinforce the impact of fiscal policies. These findings provide valuable information for policymakers seeking to balance economic and public health objectives.

Effects of housing purchase restriction on market behavior in China

To tame housing price escalation and improve housing affordability, China’s central and local governments have implemented a series of housing market regulation policies since 2009. A widely adopted policy measure is the housing purchase restriction (HPR), which aims to curb speculative demand. Using a panel dataset of 35 major cities between 2009 and 2019, this study investigates the effects of HPR on housing transactions and price volatilities. It finds that the HPR, which was a short-term action, effectively reduced housing transaction volumes and prices; however it amplified housing price volatilities in cities where the price elasticity of demand is relatively high and the price elasticity of supply is relatively low. The empirical finding can be explained as a response of housing buyers and investors to the policy based on their rational expectation for the future HPR. Such a response contributes to the undesirable outcome of HPR. Although the HPR initially achieved its goal of curbing speculation, its unintended effect on price volatilities should not be overlooked.

Demand for heroin in rats: effects of non-drug alternative substitutes and complements.

Given the central role of economic demand for drugs in substance use disorder, identifying factors that increase or decrease drug value is of high importance. The present study investigated how the concurrent availability of non-drug reinforcers previously shown to be heroin substitutes or complements affected demand for heroin in rats. In Exp. 1, three groups of rats pressed one lever for intravenous heroin infusions on a series of prices that increased over sessions. The groups differed with respect to what they received for pressing a second lever: timeout-from-avoidance (TOA) reinforcers, heroin at a constant low price, or no programmed consequences. The essential value of heroin was significantly reduced in the groups that had either TOA or low-price heroin available on the second lever. Additionally, as the price of heroin on the first lever increased, consumption of TOA reinforcers or low-price heroin infusions increased, confirming that these were substitutes for expensive heroin. In Exp. 2, two groups of rats pressed one lever for heroin infusions on a series of increasing prices. One group could press a second lever for saccharin reinforcers at a constant low price. Concurrent saccharin availability increased demand for heroin in female rats, but not in male rats. Exp. 3 compared demand for saccharin in groups that had or did not have concurrent access to low-price heroin. Concurrent heroin availability caused an increase in estimated saccharin consumption at no cost (Q0), but did not affect elasticity of demand for saccharin. The outcome of Exp. 1 suggests that non-drug means of reducing pain or stress can weaken demand for opioids. Exp. 2 and 3 show that, in contrast, availability of some non-drug alternatives can increase demand for heroin in female rats and that heroin can increase consumption of non-drug alternatives at low price. Overall, these results show, consistent with the contextualized reinforcer pathology model, that opioid value depends on the broader behavioral economic context in which opioids and non-drug alternatives are available.

EXPRESS: Sustainable Product Profit Potential and Availability

Consumers have become more interested in purchasing products produced using more sustainable practices, with much of the recent growth in consumer-packaged goods (CPGs) within the United States from products with clearly labeled sustainability claims on their packaging. However, many categories have low levels of sustainable product market share, with substantial geographic variation. We assess the role of demographic variables on the availability of sustainable products, after controlling for their relative “profit potential” (determined by quantity, price, and price elasticity). To estimate profit potential, we estimate product and county-specific demand elasticities for seven CPG subcategories in the grocery and mass merchandiser formats. A meta-analysis of the estimates show that the relative profit potential of sustainable products increases with income and Democratic vote share. These variables predict greater sustainable product availability than would be expected from their higher profit potential. The fraction of the county that is white does not significantly impact profit potential but leads to higher sustainable product availability. Our findings provide evidence that managers likely use simple demographic heuristics to make product stocking decisions (supported by a separate survey of retailers) that do not necessarily reflect preferences for sustainable products and their profitability.

Weather Effects in Energy Seasonal Adjustment: An Application to France Energy Consumption

This paper addresses the challenge of adjusting energy consumption data for weather variations by introducing a novel General Weather Indicator (GWI). The GWI combines multiple weather variables, including temperature, wind, sunlight, rain, and cloudiness, using a novel econometric approach that applies K-means for threshold identification and LASSO for variable selection. Through an empirical analysis of sectoral electricity and natural gas consumption in France, we demonstrate that the GWI outperforms the standard HDD approach by addressing three main concerns: the lack of statistical criteria for defining the base temperature, the reliance solely on temperature as the weather variable, and the assumption of a constant base temperature over time and space. Based on these results, we propose an analysis of the sectoral functional form and an estimation of weather elasticities for energy demand in France at both the monthly and daily levels. JEL Classification: C32, E61, P28, Q47

An Analysis of Preferences and Demand for Fruits in Pakistan Using Linear Approximate Almost Ideal Demand System

Introduction: Consumer preferences play a significant role in determining the choices for purchasing fresh fruits. Consumer interest in fruits is crucial in influencing agricultural production and food policies. Factors like average income per person and the price of fruit have a notable impact on what consumers prefer and, as a result, on the demand for fruit. Objectives: The aim of this study is to examine the patterns of fruit consumption and preferences across the four provinces of Pakistan. Materials & Methods: Data from Household Integrated Economic Survey (HIES) 2018-19 is used for the selected fruits i.e. banana, malta, apple, grapes, watermelon alou bhukhara and dry fruits. The Linear Approximate Almost Ideal Demand System (LA/AIDS) model is used to estimate Marshallian, Hecksian and Expenditure elasticities of demand. Results: The result shows that the expenditure elasticities of all fruits for all provinces is positive and less than unity suggesting they are necessities except for dry fruits (1.2969) in Khyber Pakhtunkhwa, whose expenditure elasticity is greater than unity and considered as luxury in Khyber Pakhtunkhwa. There is no significant difference found by comparing Marshallian own price elasticities for all fruits across provinces of Pakistan. The estimated Marshallian own price elasticities for all fruits are inelastic in all provinces, while in Baluchistan banana (-0.9444) is close to unit elastic and it is inelastic in other three provinces i.e. Punjab, Sindh and Khyber Pakhtunkhwa, which means banana consumption is less in Baluchistan than other three provinces. Conclusion: According to estimates of Marshallian cross price elasticities 21 fruits were found to be complements, only alou bhukhara and dry fruits found to be substitute in Khyber Pakhtunkhwa, while other three provinces all fruits are complements. As most of the own price elasticities of fruits are inelastic for all provinces, any change in own price would result in a massive increase in expenditure on these fruits.

Procurement institutions and essential drug supply in low and middle-income countries.

International procurement institutions play an important role in drug supply. We study price, delivery, and procurement lead time of drug products for major infectious diseases (antiretrovirals, antimalarials, antituberculosis, and antibiotics) in 106 developing countries from 2007-2017 across procurement institution types. We find that pooled procurement lowers prices: pooling internationally is most effective for small buyers and concentrated markets, while pooling within-country is most effective for large buyers and unconcentrated markets. Pooling can reduce delays, but at the cost of longer anticipated procurement lead times. Finally, pooled procurement is more effective for older drugs, compared to patent pooling institutions that target newer drugs. Our findings are robust to alternative fixed effects specifications, instrumental variable estimation, selection-on-unobservables tests, and additional analyses accounting for heterogeneity in demand elasticities across buyers and interactions with major global health initiatives.

The U.S. Elasticity of Import Demand for Potash

Abstract To sustain its agricultural output, the U.S. relies heavily on imports of potash. Using two different methodologies, this study finds that U.S. import demand falls by approximately four percent in the short run and nine percent in the long run for a 10% rise in the potash import price. Price transmission with leading exporter Canada is imperfect, with U.S. prices rising only 7.7% in the short run when Canadian prices rise by 10%. The findings suggest that policies such as import tariffs would raise costs for U.S. agricultural producers because there are few potash substitutes.

Demand for a “smart” add-on: the case of in-home displays

ABSTRACT An in-home display (IHD) is an important add-on to a smart electric meter that provides continuous real-time feedback to households about their energy usage and costs. Utilising experimental variation in an online survey, I estimate a price elasticity of demand for IHD of −0.15, conditional on smart meter adoption. Households who did not pay for their smart meter device are also more sensitive to the IHD price, suggesting potential negative spillovers from smart meter subsidies.

Biomechanical and biocompatibility study of carbon fibre/kevlar high tibial osteotomy elastic composite plate.

Currently, the T-shaped titanium Tomofix bone plate is the most commonly used internal fixation bone plate in Open-wedge high tibial osteotomy (HTO). However, the modulus of elasticity of the hard titanium alloy plate does not match the modulus of elasticity of the human cortical bone, resulting in a large "stress shielding effect." At the same time, HTO bone plates have a certain elasticity of demand. In this study, the classical mechanical properties of carbon fibre/Kevlar composite plates were tested in bending, tensile and compression with different weaves ((plain weave/twill weave/W-weave/I-weave) and thicknesses. The biomechanical results after internal fixation of titanium and carbon fibre/Kevlar composite HTO bone plates of three different thicknesses (2.0mm, 2.5mm, and 3.0mm) were analyzed and compared using the finite element analysis (FEA) method, and their biocompatibility was investigated by the cell proliferation assay, and the analysis of live/dead staining activity. The combination of mechanical strength and toughness of the 2.0mm thick twill weave carbon fibre/Kevlar composite bone plate showed the best performance and a modulus of elasticity of 44.5 GPa.The finite element simulation shows that the 2.0mm thick twill carbon fibre/Kevlar elastic composite bone graft plate has the best effect in reducing the "stress shielding effect". In addition, the carbon fibre/Kevlar material has good biocompatibility, and it does not react with hemolysis. The 2.0mm twill weave carbon fibre/Kevlar elastic composite bone plate has sufficient strength and excellent toughness, and its modulus of elasticity is more compatible with human cortical bone, which fully meets the special demand for elasticity of HTO bone plate and at the same time, reduces the "stress shielding effect" with the best effect. Therefore, carbon fibre/Kevlar composites have great potential in the application of HTO bone plates.

Assessing the economic impact of tariffs: adaptations by multinationals and traders to mitigate tariffs

PurposeThe purpose of this paper is (1) to inform academics and company strategists about the utility or dangers of tariffs and (2) to examine possible strategic adaptations by multinationals and traders to mitigate tariffs.Design/methodology/approachThis paper is a comprehensive review of arguments pro and con tariffs. How traders and multinational companies can mitigate tariffs is a core section of the paper.FindingsWhile enumerating the pros and cons of these tariffs, most apolitical observers conclude that, overall, their economic and political costs typically greatly exceed the benefits. Since the USA is, by far the biggest importer, its tariff policies can affect most other exporting nations. An Appendix examines the root causes of the threatened upsurge in US tariffs under the Trump administration, stemming from concerns about globalization’s impact on domestic US manufacturing. Increased US tariffs will likely spur retaliatory tariffs from trading partners, with a possibly grave impact on world trade.Research limitations/implicationsEach of the positive and negative effects of tariffs comprehensively covered in this review paper can be the subject of empirical investigations. Tariffs have multiple effects, on producers who depend on imported inputs; on consumers of the final product; on exporters whose shipments may diminish; on governments who may choose retaliatory tariffs; on the configuration of international supply chains; and on exchange rates. While economists have created stylized models to assess the overall impacts, there is no comprehensive conclusion except that past studies show net detrimental effects of tariffs.Practical implicationsThis paper is designed to identify possible adaptations by multinationals and traders to mitigate tariffs such as marginal increases in inventories, diversification of suppliers by number and geography, passing through price increases depending on price elasticity of demand, deepening relationships with suppliers, nonmarket strategies and lobbying, investing in more automation, product and process innovation and a reduction in service or product varieties. None of these adaptations, however, are easy or costless.Social implicationsIn most cases, if not all, the economic burden of tariffs (as an incremental tax on imports) is passed on to eventual consumers of the imported products. In some instances, these higher import costs can exacerbate or trigger inflation. With retaliatory action by affected export nations, the detrimental effects of tariffs can spill over to several countries.Originality/valueFor readers of business research journals, there has not been much discussion of the impact of increased tariffs. This paper presents a comprehensive review of the benefits, costs and risks for international strategies and organization.

Cashing in on export education: evaluating the implications of taxing international students

ABSTRACT We examine the economic impact and tax efficiency of an international student levy (ISL) in Australia, addressing the limited empirical evidence on the demand elasticity of international education. To benchmark our analysis, we estimate the demand elasticity for export education and test the robustness of our findings under alternative elasticity assumptions. Our results indicate that an ISL contracts the tertiary education sector, with greater reductions in output as demand becomes more elastic. Under our central elasticity estimate of −3.5, an ISL weakens the labour market and reduces GDP. However, when demand is sufficiently inelastic, an ISL improves the terms of trade and enhances real consumption. From a tax efficiency perspective, an ISL performs well relative to other taxes, though its efficiency advantage primarily arises from the sector’s tax-exempt status rather than inherent sector-specific attributes.

Measurement of riskiness of agricultural income - evidence from India's agrarian economy

Farmers in developing countries face significant challenges due to price and production fluctuations, which impact their income and well-being. This study focuses on potato and onion farmers in India to estimate the income variability experienced by them. This research applies the Autoregressive Distributed Lag (ARDL) approach to investigate how fluctuations in market prices influence agricultural supply, with an emphasis on both short- and long-term effects. The demand elasticity (ε) for potato is equal to ‒1.32, while for onion, it is 0.54. This study finds that income volatility is a significant issue for potato and onion farmers, which could impact the long-term well-being of the farmers in India. Price fluctuations in agricultural production, combined with lower market prices, pose serious threats to farmers' income. To reduce risks, the study recommends comprehensive strategies, such as improved price stabilization initiatives, agricultural income insurance, and financial tools like commodity derivatives. In particular, it suggests considering index-based income insurance that provides compensation based on specific indicators, such as regional yield and price changes. These measures can enhance financial security and resilience for Indian farmers facing market uncertainties.