## elasticity at the mean

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bparksb
Posts: 43
Joined: Mon Mar 21, 2011 9:26 pm

### elasticity at the mean

Eviews 7

View Coefficient Diagnostics Scaled Coefficients
reports Elasticities at the mean - the help file states
The elasticity at the means are the point estimates of the coefficients scaled by the mean of the dependent variable divided by the mean of the regressor.
Yes, that is what is calculated but that is WRONG. Elasticity is calculated as slope*X/Y -
e.g., change in Y/Y divided by change in X/X
or view http://www.stata.com/support/faqs/stat/mfx_eyex.html

The standardized coefficients are correct.

Bob Parks

EViews Gareth
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### Re: elasticity at the mean

EViews calculates the elasticity at means as Coefficient_on_X * Mean(X)/Mean(Y), which is what you state is correct. The documentation might be a little unclear, but it says that it is calculated as the point estimates scaled by the mean of Y divided by the mean of X, where "scaled" is being used for "divided by".

bparksb
Posts: 43
Joined: Mon Mar 21, 2011 9:26 pm

### Re: elasticity at the mean

Sorry, I constructed an example and alas too late at night because today I see that you are right.
Bob

zeca
Posts: 15
Joined: Sun Jul 07, 2013 7:21 am

### Re: elasticity at the mean

Hi there,
I need to obtain the coeffients elasticity but the option Scaled Coefficients doesn't exist in View Coefficient Diagnostics.
I have the eviews8
Could you give me some help on this?
thanks!

EViews Gareth
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### Re: elasticity at the mean

What sort of equation do you have?

zeca
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### Re: elasticity at the mean

EViews Gareth wrote:What sort of equation do you have?

Panel Least Squares

EViews Gareth
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### Re: elasticity at the mean

It isn't offered for panel equations.

zeca
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Joined: Sun Jul 07, 2013 7:21 am

### Re: elasticity at the mean

EViews Gareth wrote:It isn't offered for panel equations.

ok, and there is any other way to calculate it for panel data equations in eviews?
thanks

EViews Gareth
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### Re: elasticity at the mean

I'm sure it can be calculated manually, if you can figure out what the calculation is.

zeca
Posts: 15
Joined: Sun Jul 07, 2013 7:21 am

### Re: elasticity at the mean

EViews Gareth wrote:I'm sure it can be calculated manually, if you can figure out what the calculation is.

Are you thinking in the following calculation?
If equation Y=a+bX1 + cX2
Elasticity X1 = Coefficient_on_X1 * Mean(X1)/Mean(Y)
Elasticity X2 = Coefficient_on_X2 * Mean(X2)/Mean(Y), ...

EViews Gareth
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### Re: elasticity at the mean

I suppose the question is, what is the mean in a panel?

zeca
Posts: 15
Joined: Sun Jul 07, 2013 7:21 am

### Re: elasticity at the mean

EViews Gareth wrote:I suppose the question is, what is the mean in a panel?

as you probably gathered so far, my econometric knowledge is not so great, could you be more specific please?
Many thnks, we've been real helpful to me!

EViews Gareth
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### Re: elasticity at the mean

I don't know what the calculation of elasticity at means is in a panel setting. If you can figure that out, you can probably calculate it easily enough in EViews.

zeca
Posts: 15
Joined: Sun Jul 07, 2013 7:21 am

### Re: elasticity at the mean

EViews Gareth wrote:I don't know what the calculation of elasticity at means is in a panel setting. If you can figure that out, you can probably calculate it easily enough in EViews.

me neither I tried searching for it in the web but I couldn't find anything. The papers I read do not explain the calculation, just present the results....

bparksb
Posts: 43
Joined: Mon Mar 21, 2011 9:26 pm

### Re: elasticity at the mean

The elasticity at the mean is exactly
If equation Y=a+bX1 + cX2 + crossection effects + time effects
Elasticity X1 = Coefficient_on_X1 * Mean(X1)/Mean(Y)
Elasticity X2 = Coefficient_on_X2 * Mean(X2)/Mean(Y), ...
So long as the coefficients do not change across time or cross section, the elasticity at each point of the data would be the series
Elasticity X1 = Coefficient_on_X1 *X1/Y
If the coefficients differ over cross sections, then it is the coefficient for each cross section times the ratio of means for that cross section.
Alas, I don't have a reference and I am too lazy to write it out long hand.

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