Description
consumerShare = supplyElasticity/sum; producerShare = demandElasticityMagnitude/sum.
An economic model specifies how quantities, prices or marginal values relate under stated assumptions. A derivative, reaction function or first-order-condition term is a local model object rather than an empirical finding or complete equilibrium solution.
consumerShare = supplyElasticity/sum; producerShare = demandElasticityMagnitude/sum.
When to use this tool
Use Tax Incidence Elasticity Share Term when checking one explicit theoretical economic-model relationship.
How to use the tool and how it works
- Enter supplyElasticity, demandElasticityMagnitude. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read consumerShare, producerShare. Use the output convention below.
Require nonnegative supplyElasticity and demandElasticityMagnitude with positive sum. consumerShare = supplyElasticity/sum; producerShare = demandElasticityMagnitude/sum.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| supplyElasticity | Supply Elasticity | Required. Finite number; minimum 0. |
| demandElasticityMagnitude | Demand Elasticity Magnitude | Required. Finite number; minimum 0. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| consumerShare | Consumer Share | Required. Finite number. |
| producerShare | Producer Share | Required. Finite number. |
{
"input": {
"supplyElasticity": 2,
"demandElasticityMagnitude": 1
},
"output": {
"consumerShare": 0.6666666666666666,
"producerShare": 0.3333333333333333
}
}Limitations and assumptions
- Demand elasticity is entered as a positive magnitude. These are local competitive tax-incidence shares under the model, not statutory liability or an empirical incidence estimate.
- Inputs must satisfy both the field types and the cross-field conditions above. Invalid input causes an error; a successful false flag or documented placeholder is a different result.
- Numeric calculations use binary floating point unless exact decimal-integer arithmetic is explicitly stated. No hidden measurement tolerance or decimal rounding is added; nonfinite or out-of-contract results are rejected. Numeric signed-zero results are exported as zero.
Alternative or Complementary methods
Use a complete model, defensible parameter estimates and suitable identification before drawing empirical or policy conclusions.
References
Similar or alternative tools
- Marginal Product Elasticity Term
elasticity = suppliedMarginalProduct*inputQuantity/outputQuantity; if the direct product overflows or spuriously underflows, reorder multiplication with the input/output ratio.
- Elasticity Logchange Residual
quantityLogChange = ln(quantityAfter)-ln(quantityBefore); predictedLogChange = elasticity*(ln(priceAfter)-ln(priceBefore)); residual is observed minus predicted.