Bootstrapping for consistent standard errors for translog price elasticities Some evidence from industrial electricity demand

This note extends the Hirschberg-Aigner method for deriving price elasticities of various time differentiated electric inputs, using estimated cost-share elasticities in a translog formulation. The H-A method leaves out an important component of variance - as the estimated cost share elasticities are themselves estimates and are not known quantities. This omission leads to overestimating the significance levels of price elasticities. With our …