CV-methods: Methods For Calculating Compensating Variation (CV)
Description
Calculate the amount of money a consumer would need to
be paid to be just as well off as they were before the merger.
Methods
signature(object = c(Logit,LogitNests))-
All the information needed to
compute CV is already available within the Logit and Nested Logit classes.
signature(object = c(CES, CESNests), revenueInside)-
The CV method for the “CES” and nested “CES” classes has an additional
parameter, `revenueInside', which must be set equal to
the total amount that consumers have spent on
products inside the market in order for CV to be calculated.
signature(object = AIDS , totalRevenue)-
The CV method for “AIDS” has an additional parameter, ‘totalRevenue’,
which should aggregate income (e.g. GDP). If supplied computes CV in terms of dollars. If missing, CV is
calculated as a percentage change in aggregate in income. must be set equal to the vector of pre-merger prices for all
products in the market in order for CV to be calculated.
signature(object = c(Linear,LogLin))-
Although no additional information is needed to calculate CV for
either the “Linear” or “LogLin” classes, The CV method will fail if
the appropriate restrictions on the demand parameters have not been imposed.