Investor Presentaiton

• Estimates of Elasticity: Method • • Following Diewert (1976) and Feenstra (2003), we choose a translog expenditure function to estimate the elasticity of substitution in Allen-Hicks sense. In(Ę;) = ln(U; ) +αo; + Σ a; In(p;;) + ΣΣ^, ln(p)](P) j α j ji j k ji. With some reasonable assumptions it is possible to show that Smj =αm + 2km ln(Pkj) -Σ//km k The elasticity of substitution can be retrieved from the parameters along with the market share value. See technical details in the appendix of the paper.

View entire presentation