<p>Let variable $y$ be determined as a function of variable $x$: $y=f(x)$.</p>

<p>Then the "$x$-elasticity of $y$" is computed as $$\frac{\partial y}{\partial x}\frac{x}{y}.$$</p>

<p>We are used to seeing the "price-elasticity of demand" where $y$ is the quantity demanded, $f$ is the Marshallian demand function, and $x$ is the price. But the same concept can be applied more generally.</p>

<p>For example, if $x$ is income, $y$ is quantity, and $f$ is the Hicksian demand function then we could compute the "income elasticity of Hicksian demand" using the above formula.</p>

CC BY-SA 3.0
2018-02-07T18:30:52.240Z
2018-02-07T18:30:52.240Z
Ubiquitous
<p>If we have Hicksian (compensated) demand functions, how can we determine the income elasticity and own price elasticity?</p>

<p>Is the procedure the same as for Marshallian (uncompensated) demands?</p>

CC BY-SA 3.0
2018-02-07T14:50:18.960Z
What do you mean by "procedure"? The formula for calculating income elasticity?
Herr K.
<utility><supply-and-demand><optimization>
Determining the elasticity of Hicksian Demands
Colin
# Determining the elasticity of Hicksian Demands

(Asked by: username_0 on 2018-02-07)

If we have Hicksian (compensated) demand functions, how can we determine the income elasticity and own price elasticity?

Is the procedure the same as for Marshallian (uncompensated) demands?

**Tags:** utility, supply-and-demand, optimization
> **Comments:**
> **username_1**: What do you mean by "procedure"? The formula for calculating income elasticity?  

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## 1 answers

### Answer by username_2 on 2018-02-07. Score: 2

Let variable $y$ be determined as a function of variable $x$: $y=f(x)$.

Then the "$x$-elasticity of $y$" is computed as $$\frac{\partial y}{\partial x}\frac{x}{y}.$$

We are used to seeing the "price-elasticity of demand" where $y$ is the quantity demanded, $f$ is the Marshallian demand function, and $x$ is the price. But the same concept can be applied more generally.

For example, if $x$ is income, $y$ is quantity, and $f$ is the Hicksian demand function then we could compute the "income elasticity of Hicksian demand" using the above formula.


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