<p>Let <span class="math-container">$C(I)$</span> be the level of consumption as a function of income. Then the definition of elasiticity is :
<span class="math-container">$$
\frac{d C(I)}{dI} \times \frac{I}{C(I)}.
$$</span>
Given your linear specification, you have that <span class="math-container">$\frac{d C(I)}{dI} = b$</span>.</p>

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2023-10-26T06:15:58.600Z
2023-10-26T06:15:58.600Z
tdm
<p>What is the formula of the income elasticity at the mean values?</p>
<p>I have two variables, I is income and C is consumption. And I have 10 observations (sample size)</p>
<p>Regresison equation</p>
<p><span class="math-container">$$C = a + bI $$</span></p>
<p>Assume <span class="math-container">$\bar{I}$</span> is mean of income and <span class="math-container">$\bar{C}$</span> is mean of consumption expenditure. Then, how can I calculate this elasticity?</p>
<p>Thank you.</p>
<p>Thank you.</p>

<elasticity><income-effect>
the income elasticity at the mean values
studentp
# the income elasticity at the mean values

(Asked by: username_0 on 2023-10-23)

What is the formula of the income elasticity at the mean values?

I have two variables, I is income and C is consumption. And I have 10 observations (sample size)

Regresison equation

$$C = a + bI $$

Assume $\bar{I}$ is mean of income and $\bar{C}$ is mean of consumption expenditure. Then, how can I calculate this elasticity?

Thank you.

Thank you.

**Tags:** elasticity, income-effect


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## 1 answers

### Answer by username_1 on 2023-10-26. Score: 1

Let $C(I)$ be the level of consumption as a function of income. Then the definition of elasiticity is :
$$
\frac{d C(I)}{dI} \times \frac{I}{C(I)}.
$$
Given your linear specification, you have that $\frac{d C(I)}{dI} = b$.


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