Elasticity income

In the third section we analyse expected effects from a microeconomic perspective, and we discuss to what extent the neoclassical microeconomic theoiy of demand is applicable to the case of pharmaceuticals. We explore the effects of co-payment on consumption and expenditure, and how it is shared between user and insurer, but also the possible effects on the health of individuals and populations. Equity considerations are inevitably raised in this analysis. The elements on which the analysis hinges in this section are price and income elasticities of demand for pharmaceuticals the role of the doctor as an inducer of demand consumer sovereignty discontinuities in demand functions and other notable exceptions to the classical ma.rgina.1ist. theoiy of demand. These exceptions require special microeconometric models and methods. 

It is also well known that when the income of the consumer goes up, the purchases will tend to go up as well. This is known as the income elasticity, which can be described by a similar equation ... 

Table 9.17 shows the U.S. household vehicle expenses in 1988, arranged by household income. It is seen that, as the household income increases from below 10,000 to above 75,000, the gallons purchased per household more than doubled, from 650 to 1400 gallons/year, but the burden of the fuel purchase as a percentage of household income drops from 8.4 to 1.6%. The income elasticity can be computed to be... 

The effect of fluctuations in personal income on the demand for a product is measured by income elasticity ... 

Nuclear Power Issues and Choices, a study prepared by the Ford Foundation and MITRE Corporation, a strategy study center, claims that the income elasticity of demand for energy was between 0.8 and 0.9 for the United States in 1975. 

Income elasticity A measure of how responsive consumption of platinum is to a change in personal income when the price of platinum itself is not changed. 

In this way, soybean demand is essentially a derived demand for meat. Soybean has risen to become a leading crop because the income elasticity of meat is high. Consumers shift their consumption from grains, such as rice and wheat, to meat and other animal products as personal incomes rise around the world. 

On the price issue, it seems that the actual price is less important than the relative price level in respect with the conventionally grown product, and income elasticity of demand for organic foods is generally small. 

Note Table 3-1 lists the functions and parameter values used in the simulations. Except for the parameter under investigation, all parameters were set at initial values. Elasticities were calculated using 1 percent decreases in the initial values. To determine the nonlabor income elasticities, we examined a 1 percent decrease in3 from 1,000 ( 1,000 represents approximately 10 percent of a worker s wage income). The wage and compensation for risk elasticities for v, 5, y, total number of workers, and total number of establishments were less than 0.(X)1 and 0.035, respectively, at all injury probabilities. 

Inferior goods or commodities. Goods that have negative income elasticities thus, the quantity demanded falls as incomes rise. 

The model suggests that the likelihood of the existence of lead markets increases with the income elasticity of an innovation (Bj), the larger the difference between the income elasticity of conq>eting innovation designs and the larger the lead of a country in terms of per-capita-income and the larger the cost of entry in a country market. 

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