Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/268054 
Year of Publication: 
2022
Series/Report no.: 
Discussion Papers No. 978
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
Consumers often face choice settings in which alternatives are discrete. Examples include choices between variants of differentiated products, modes of urban transportation, residential locations, etc. In this paper compensated price elasticities and a corresponding(aggregate) Slutsky equation for discrete choice models are derived. A remarkable feature of compensated price elasticities in the discrete case is that they usually are not symmetric, as compensated elasticities with respect to a price increase versus a price decrease may be different. Finally, compensated marginal price effects and elasticities are derived for selected examples.
Subjects: 
Compensated choice
Discrete/continuous choice
Slutsky equation
Marginalcompensated effects
JEL: 
C25
C43
D11
Document Type: 
Working Paper

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