Income Elasticities without Parameters

15 Pages Posted: 30 Jul 2020

See all articles by Per Hjertstrand

Per Hjertstrand

Research Institute of Industrial Economics (IFN)

Date Written: March 20, 2020

Abstract

This paper proposes a simple non-parametric framework to calculate income elasticities from a data set of observed prices and consumed quantities without having to estimate any parameters. The framework can be applied when the price-quantity data satisfies a revealed preference axiom called the strong version of the strong axiom of revealed preference (SSARP). The framework is used to calculate income elasticities for food and non-alcoholic drinks from a rich panel of household expenditures. For this category, it is found that households are rather homogeneous in their demand responses.

Keywords: Income elasticity, Non-parametric, Revealed preference, SSARP

JEL Classification: D11, D12

Suggested Citation

Hjertstrand, Per, Income Elasticities without Parameters (March 20, 2020). IFN Working Paper No. 1324 (2020), Available at SSRN: https://ssrn.com/abstract=3643320 or http://dx.doi.org/10.2139/ssrn.3643320

Per Hjertstrand (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
8
Abstract Views
140
PlumX Metrics