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Elasticity
To get
points
To get
How
Can
With
The
How
is it done?
- explain with a scatter diagram.
With
Resort
to statistical techniques.
- Regression.
Steps
STEPS:
Listing of variables
Model specification
Data collection
Demand function
Linear or non-linear
An Example
Results:
Q
Interpretation
Coefficient
Tests
p-
of Determination : R2
of Statistical significance
value
Results continued
Elasticity estimation
Base values
X1: 1.75; X2: 15000; X3:0.75; X4(urban):0
Q = 7.05
Compute
Valid
Important
More
Estimations:
Q=1000
2P+0.0003A+ 0.001I
+0.000001N+0.1Pr
Non-Linear Specifications:
= B* A * P
S/
A = B * A -1 * P
S/
A = S * / A
= S/ A * A / S
Results:
Interpretation
of coefficients as Elasticities .