Elasticity Measure: Difference between revisions

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=== 2014 ===
=== 2014 ===
* (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/Elasticity_(economics) Retrieved:2014-11-29.
* (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/Elasticity_(economics) Retrieved:2014-11-29.
** An ''elastic'' variable (or elasticity value greater than 1) is one which responds more than proportionally to changes in other variables. In contrast, an ''inelastic'' variable (or elasticity value less than 1) is one which changes less than proportionally in response to changes in other variables.        <P>        Elasticity can be quantified as the ratio of the [[percent change|percentage change]] in one variable to the percentage change in another variable, when the latter variable has a causal influence on the former. A more [[Elasticity_of_a_function|precise definition]] is given in terms of differential calculus. It is a tool for measuring the responsiveness of one variable to changes in another, causative variable. Elasticity has the advantage of being a unitless ratio, independent of the type of quantities being varied. Frequently used elasticities include [[price elasticity of demand]], [[price elasticity of supply]], [[income elasticity of demand]], [[elasticity of substitution]] between [[factors of production]] and [[elasticity of intertemporal substitution]].        <P>        Elasticity is one of the most important concepts in neoclassical economic theory. It is useful in understanding the [[incidence of indirect taxation]], [[marginal concepts]] as they relate to the [[theory of the firm]], and [[distribution of wealth]] and different [[good (economics)|types of goods]] as they relate to the [[theory of consumer choice]]. Elasticity is also crucially important in any discussion of [[welfare economics|welfare]] distribution, in particular [[consumer surplus]], [[producer surplus]], or [[government surplus]].        <P>        In empirical work an elasticity is the estimated coefficient in a [[linear regression]] equation where both the [[dependent variable]] and the [[independent variable]] are in [[Natural logarithm|natural logs]]. Elasticity is a popular tool among empiricists because it is independent of units and thus simplifies data analysis.        <P>        A major study of the [[price elasticity of supply]] and the [[price elasticity of demand]] for US products was undertaken by Hendrik S. Houthakker and Lester D. Taylor. <ref> Hendrik S. Houthakker, Lester D. Taylor (1970). </ref>
** An ''elastic'' variable (or elasticity value greater than 1) is one which responds more than proportionally to changes in other variables. In contrast, an ''inelastic'' variable (or elasticity value less than 1) is one which changes less than proportionally in response to changes in other variables.        <P>        Elasticity can be quantified as the ratio of the [[percent change|percentage change]] in one variable to the percentage change in another variable, when the latter variable has a causal influence on the former. A more [[Elasticity_of_a_function|precise definition]] is given in terms of differential calculus. It is a tool for measuring the responsiveness of one variable to changes in another, causative variable. Elasticity has the advantage of being a unitless ratio, independent of the type of quantities being varied. Frequently used elasticities include [[price elasticity of demand]], [[price elasticity of supply]], [[income elasticity of demand]], [[elasticity of substitution]] between [[factors of production]] and [[elasticity of intertemporal substitution]].        <P>        Elasticity is one of the most important concepts in neoclassical economic theory. It is useful in understanding the [[incidence of indirect taxation]], [[marginal concept]]s as they relate to the [[theory of the firm]], and [[distribution of wealth]] and different [[good (economics)|types of goods]] as they relate to the [[theory of consumer choice]]. Elasticity is also crucially important in any discussion of [[welfare economics|welfare]] distribution, in particular [[consumer surplus]], [[producer surplus]], or [[government surplus]].        <P>        In empirical work an elasticity is the estimated coefficient in a [[linear regression]] equation where both the [[dependent variable]] and the [[independent variable]] are in [[Natural logarithm|natural logs]]. Elasticity is a popular tool among empiricists because it is independent of units and thus simplifies data analysis.        <P>        A major study of the [[price elasticity of supply]] and the [[price elasticity of demand]] for US products was undertaken by Hendrik S. Houthakker and Lester D. Taylor. <ref> Hendrik S. Houthakker, Lester D. Taylor (1970). </ref>
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Latest revision as of 21:02, 9 May 2024

An Elasticity Measure is a rate measure (unitless ratio) of responsiveness of one variable relative to another variable.



References

2014

  1. Hendrik S. Houthakker, Lester D. Taylor (1970).


  • (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/Elasticity_(economics) Retrieved:2014-11-29.
    • In economics, elasticity is the measurement of how responsive an economic variable is to a change in another. For example:
      • "If I lower the price of my product, how much more will I sell?"
      • "If I raise the price of one good, how will that affect sales of this other good?"
      • "If we learn that a resource is becoming scarce, will people scramble to acquire it?"

2011

1970