This is an approximation to the Slutsky equations, inasmuch as we use these as the exponents directly, instead of solving for exponents that produce these values as the elasticities.

calc1eps(alpha.s, alpha.n, eta.s, eta.n, xi)

Arguments

alpha.s

Budget fraction for staple foods.

alpha.n

Budget fraction for nonstaple foods.

eta.s

Income elasticity for staple foods.

eta.n

Income elasticity for nonstaple foods.

xi

Matrix of Hicks elasticities

Value

matrix of price elasticities, where xi[1],xi[4] are staple and non-staple price elasticities, rest are cross elasticities