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Price Elasticities from Survey Data: Extensions and Indonesian Results

In: Issues in Contemporary Economics

Author

Listed:
  • Angus Deaton

    (Princeton University)

Abstract
For many questions of public policy, it is important to know how consumers change their expenditures on goods in response to changes in prices. For developing countries, there are typically rather few time series data from which price elasticities can be inferred. By contrast, cross-sectional household expenditure surveys are available for many LDCs. In Deaton (1986, 1987) I developed a methodology for using such household survey data to detect spatial variation in prices, and to estimate price elasticities by comparing spatial price variation to spatial demand patterns. In the first paper, I showed how to estimate the own-price elasticity for a single good by comparing its demand to its price. In the second paper, the methodology was extended to cover systems of demand functions, so that cross-price elasticities could be estimated, and substitution patterns studied.

Suggested Citation

  • Angus Deaton, 1991. "Price Elasticities from Survey Data: Extensions and Indonesian Results," International Economic Association Series, in: Marc Nerlove (ed.), Issues in Contemporary Economics, chapter 10, pages 253-283, Palgrave Macmillan.
    • Handle: RePEc:pal:intecp:978-1-349-11576-1_10
    DOI: 10.1007/978-1-349-11576-1_10
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