Table 1.
Definitions.
Fig 1.
Relationship between income elasticity and uncompensated own price elasticity of demand.
The darker line (in the middle) indicates the median of simulated values, while the lighter external lines define the 95% credible interval calculated using a Monte-Carlo simulation. The average budget share was drawn from a uniform distribution ranging from 0.0001 to 0.1, and the elasticity of the marginal utility of income was drawn from a normal distribution with mean equal to -1.26 and standard deviation equal to 0.1.
Fig 2.
Relationship between income elasticity of two (preference) independent bundles of goods A and B, and the cross price elasticity of demand for a bundle of goods A with respect to B.
The cross price elasticity is negative, null or positive, depending on whether the income elasticity of B is smaller of, equal to, or larger of the absolute value of the elasticity of the marginal utility of income. The average budget share is equal to 0.05 and the elasticity of the marginal utility of income is equal to -1.26.
Fig 3.
Quantification of the uncertainty affecting the estimates of the cross price elasticity of demand for a bundle of goods A, whith respect to the price of B.
In this example, the income elasticity of the bundle of goods B is equal to 0.2, and the cross price elasticity is plotted against the income elasticity of demand for A. The darker line (in the middle) indicates the median of simulated values, while the lighter external lines define the 95% credible interval calculated using a Monte-Carlo simulation. The average budget share was drawn from a uniform distribution ranging from 0.0001 to 0.1, and the elasticity of the marginal utility of income was drawn from a normal distribution with mean equal to -1.26 and standard deviation equal to 0.1.
Fig 4.
Comparison of simulation results with published estimates of the income elasticity and of the uncompensated own price elasticity of demand for 4 bundles of goods: clothing and footwear, education, healthcare, and recreation.
The estimates (colored circles) in the three panels refer to low-income, middle-income, and high-income countries and were obtained fitting the Florida model to country survey data (source: Seale JL, Regmi A, Bernstein J. International evidence on food consumption patterns. Economic Research Service; US Department of Agriculture; 2003). The darker line (in the middle) indicates the median of simulated values, while the lighter external lines define the 95% credible interval calculated using a Monte-Carlo simulation. The average budget share was drawn from a uniform distribution ranging from 0.0001 to 0.1, and the elasticity of the marginal utility of income was drawn from a normal distribution with mean equal to -1.26 and standard deviation equal to 0.1.