An alternative definition of the arc elasticity of demand

Abstract

This paper presents a simple alternative measure for the arc elasticity of demand that comes naturally and possesses some attractive properties. In particular, it equals the point demand elasticity at some point inside the interval, thus leading to the exact estimations of demand elasticity when this is constant. It also yields narrower values that Dalton’s, Lerner’s and Allen’s widely used measures, and its relationships with the arc revenue elasticities keep exact analogy with those established for the point elasticity case.

Citation

Vázquez, A. (1998), "An alternative definition of the arc elasticity of demand", Journal of Economic Studies, Vol. 25 No. 6, pp. 553-562. https://doi.org/10.1108/01443589810233892