Cross-Price Elasticities of Demand Across 114 Countries

Overview

This report presents a simple methodology for calculating cross-price elasticities across countries, using the Frisch own-price elasticity. Cross-price elasticities are calculated for 9 major consumption categories from the 1996 International Comparison Program data across 114 countries. The consumption categories are: food, beverage, and tobacco; clothing and footwear; education; gross rent, fuel, and power; house furnishings and operations; medical care; recreation; transport and communications; and "other" items. Additionally, cross-price elasticities are calculated and reported for a two-good demand system of food and nonfood. The elasticity estimates from this report are the only available consistent cross-country cross-price elasticity estimates across this large a number of countries and consumption categories.