Price Elasticities from Survey Data: Extensions and Indonesian Results
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.
KeywordsMaize Covariance Income liMe Ditioned
Unable to display preview. Download preview PDF.
- Case, A. C. (1988) ‘Analyzing Spatial Patterns in Developing Country Data’, unpublished Ph.D. thesis, Department of Economics, Princeton University, Princeton, NJ, USA.Google Scholar
- Deaton, A. S. (1986) ‘Quality, Quantity, and Spatial Variation of Price’, unpublished paper, Woodrow Wilson School, Princeton University, Princeton, NJ, USA.Google Scholar
- Deaton, A. S. (1988) ‘Quality, Quantity, and Spatial Variation of Price’, American Economic Review, vol. 78, pp. 418–30.Google Scholar
- Deaton, A. S., and Muellbauer, J. (1980) ‘An Almost Ideal Demand System’, American Economic Review, vol. 70, pp. 312–26.Google Scholar
- Laraki, K. (1988) ‘The Nutritional, Welfare, and Budgetary Effects of Price Reform in Developing Countries; Food Subsidies in Morocco’, unpublished paper, Welfare and Human Resources Unit, The World Bank, Washington DC, USA.Google Scholar