I would like to regress on income elasticity on households data, could anyone suggest me any models and methods? So far I have seen many papers talking about Engel curve model.
One more important question, can income elasticity or own-price demand elasticity be regressed or calculated if I only have cross-section data (which is only data of one year)?
Yes you can run a regression in this case provided that you have sufficient number of observation covering low to high values of income/price otherwise you will end up in non-generalizable coefficient values. Since this is a cross-sectional study pay closer attention to your sample selection and make sure you select a representative sample.
Kind regards and good luck with your research
Thushara
You can get income elasticities if you have data on income from each household. If you believe that this elasticity can be stable across households, you can also apply a log-log specification.
Regarding own price elasticity of demand, you can also get it if dataset contains data on prices payed by the consumers. If those prices vary sufficiently in the sample you would be able to obtain an estimate for the price elasticity. If prices are quite similar between households that kind of elasticity would not be possible to be estimated with cross section data.
- Badges
- Science topic
- Similar topics
- Mathematics
- Statistics
- Regression