Some Implications of the “New Theory of Consumer Behavior” for Interpreting Estimated Demand Elasticities

Problems of interpreting price elasticities of demand have been explored, both explicitly (Manderscheid) and implicitly (Purcell and Raunikar), in articles in this Journal. This note examines a problem not considered in these discussions. Specifically, we analyze some implications of the recent developments in the theory of consumer behavior for the estimation and interpretation of demand elasticities.