Elast-Methods: Methods For Calculating Own and Cross-Price Elasticities
In antitrust: Tools for Antitrust Practitioners

Elast-Methods

R Documentation

Methods For Calculating Own and Cross-Price Elasticities

Description

Calculate the own and cross-price elasticity between any two products in the market.

Usage

## S4 method for signature 'Cournot'
elast(object, preMerger = TRUE, market = FALSE)

## S4 method for signature 'Linear'
elast(object, preMerger = TRUE, market = FALSE)

## S4 method for signature 'Logit'
elast(object, preMerger = TRUE, market = FALSE)

## S4 method for signature 'LogLin'
elast(object, preMerger = TRUE, market = FALSE)

## S4 method for signature 'AIDS'
elast(object, preMerger = TRUE, market = FALSE)

## S4 method for signature 'LogitNests'
elast(object, preMerger = TRUE, market = FALSE)

## S4 method for signature 'CES'
elast(object, preMerger = TRUE, market = FALSE)

## S4 method for signature 'CESNests'
elast(object, preMerger = TRUE, market = FALSE)

## S4 method for signature 'VertBargBertLogit'
elast(object, preMerger = TRUE, market = FALSE)

Arguments

`object`	An instance of one of the classes listed above.
`preMerger`	If TRUE, calculates pre-merger price elasticities. If FALSE, calculates post-merger price elasticities. Default is TRUE.
`market`	If TRUE, calculates the market (aggregate) elasticity. If FALSE, calculates matrix of own- and cross-price elasticities. Default is FALSE.

Details

When ‘market’ is FALSE, this method computes the matrix of own and cross-price elasticities. Element i,j of this matrix is the percentage change in the demand for good i from a small change in the price of good j. When ‘market’ is TRUE, this method computes the market (aggregate) elasticities using share-weighted prices.

When ‘preMerger’ is TRUE, elasticities are calculated at pre-merger equilibrium prices and shares, and when ‘preMerger’ is FALSE, they are calculated at post-merger equilibrium prices and shares.