New methods aren’t always silver bullets: Challenges with use of the inverse hyperbolic sine transformation for elasticity estimation
How do different types of expenditures relate to households’ overall budgets? To characterize this relationship, economists frequently use demand elasticities, which are the percent change in expenditures on a given item (or group of items) associated with a percent change in their budget. Using household expenditure data, a simple way to generate an elasticity estimate …
