Topic
Price elasticity of supply
About: Price elasticity of supply is a research topic. Over the lifetime, 2260 publications have been published within this topic receiving 62868 citations. The topic is also known as: PES & Es.
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1,600 citations
1,011 citations
TL;DR: In this article, the authors develop and estimate a model of supply response when transactions costs create a situation where some producers buy, others sell, and others do not participate in markets.
Abstract: We develop and estimate a model of supply response when transactions costs create a situation where some producers buy, others sell, and others do not participate in markets. We present two rationales for why producing households may have different relationships to the market: proportional and fixed transactions costs. Using data on Mexican corn producers, we estimate an empirical model that allows for separate tests of the significance of both types of transactions costs, revealing that both fixed and proportional transactions costs matter for the estimation. The results provide consistent estimates of supply elasticity and measures of the relative importance of factors determining both proportional and fixed transactions costs.
848 citations
TL;DR: For example, this article argued that research on cities is different from research on countries, and that work on places within countries needs to consider population, income, and housing prices simultaneously.
Abstract: *Empirical research on cities starts with a spatial equilibrium condition: workers and fi rms are assumed to be indifferent across space. This condition implies that research on cities is different from research on countries, and that work on places within countries needs to consider population, income, and housing prices simultaneously. Housing supply elasticity will determine whether urban success reveals itself in the form of more people or higher incomes. Urban economists generally accept the existence of agglomeration economies, which exist when productivity rises with density, but estimating the magnitude of those economies is diffi cult. Some manufacturing fi rms cluster to reduce the costs of moving goods, but this force no longer appears to be important in driving urban success. Instead, modern cities are far more dependent on the role that density can play in speeding the fl ow of ideas. Finally, urban economics has some insights to offer related topics such as growth theory, national income accounts, public economics, and housing prices. (JEL R11, R23, R31, R32)
837 citations