A Complete Scheme for Computing All Direct and Cross Demand Elasticities in a Model with Many Sectors

Abstract

Usually it is easier to obtain estimates for budget proportions and Engel elasticities than for elasticities with respect to price. By making certain want independence assumptions, the elasticities with respect to price can be deduced from the knowledge of budget proportions and Engel elasticities. In this connection the concept of the flexibility of the marginal utility of money is essential. A system of formulae describing these relations is given. In an appendix certain fundamental properties of the relations between marginal and proper choice field criteria are discussed.