antitrust (version 0.95.1)

elast-methods: Methods For Calculating Own and Cross-Price Elasticities

Description

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

Usage

"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.

Value

where k is the number of products in the market

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.