Price elasticities of demand are minus one-half

Kenneth W. Clements

Economics Letters, 2008, vol. 99, issue 3, pages 490-493

Abstract: As an empirical regularity for broad groups, price elasticities of demand are scattered around minus one-half, a result not inconsistent with preference independence. When nothing is known about the price-sensitivity of a good, a reasonable first approximation to its price elasticity is minus one-half.

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