An Elasticities Approach to Estimating Excess Demand in Price-Controlled Markets

William M. Liefert

No 333357, Miscellaneous Publications from United States Department of Agriculture, Economic Research Service

Abstract: This paper develops a method for estimating excess demand in markets where state-controlled prices are set below market-clearing levels. The estimation equations express excess demand as a function of price elasticities of supply and demand. Although the method is most appropriate for empirical work involving centrally planned economies, it is not specific to that system. The procedure is then used to calculate excess consumer demand for meat in the USSR during the 1980's. Our best defended results from sensitivity analysis suggest that in the late 80's close to one quarter of the total quantity demanded of meat at state prices was not satisfied by purchase.

Keywords: Demand and Price Analysis; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 56
Date: 1991-04
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersmp:333357

DOI: 10.22004/ag.econ.333357

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