# Tag Info

Accepted

### Why are elasticities defined as logarithmic derivatives?

If I understand your question, first the elasticity haven't units. The problem with $\partial Y/\partial X$ is that if you change the measure units the result is different. Is less problematic to ...
• 176

### Proof coefficient in log-log model is equal to coefficient of elasticity

Because $\Bbb E[\varepsilon \mid x]= 0$ is one of the key assumptions for the estimation.
• 1,325
Accepted

### Elasticity and logarithms

Because $a$ is a parameter, and so $$\eta = \frac{ d \log y}{d \log x} = \frac{ d \log a + d \ b \log x}{d \log x} = 0 + b.$$
• 29.5k

### How do I calculate price elasticity of demand using historical price and quantity data?

You've fallen into a really common pitfall -- the spurious regression. The parameters you chose to include can't be chosen 'willy nilly' by throwing data into a regress command. Ultimately this can't ...
• 264

### How exactly does elasticity relate to slope?

The two demand functions $D_1(p),D_2(p)$ cross at the point $(Q,p)$. Their respective elasticities at price $p$ are \begin{align*} \epsilon_1(p) & = \frac{\text{d}D_1(p)}{\text{d}p}\frac{p}{D_1(p)}...
• 29.5k

• 57.4k

• 15.6k
Accepted

### Usefulness of the value for the slope of the demand curve

Price elasticity of demand is related (but not equal) to the inverse of the slope of the demand curve. This Wikipedia article defines PED as: Price elasticity of demand (PED or Ed) is a measure ...
• 1,109