The Income Elasticity of Demand calculator computes the income elasticity of demand based on the change in quantity of demand and the change in income.
INSTRUCTIONS: Enter the following:
- (CD) This is the percent change in the quantity of demand
- (CI) This is the percent change in income
Income Elasticity of Demand (IED): The elasticity is returned as a real number. However, this can be converted to a percentage via the pull-down menu.
The Math / Science
The formula for Income Elasticity of Demand is:
EID = CD/CI
where:
- EID = Income Elasticity of Demand
- CD = Percent change in quantity of demand
- CI = Percent change in income
Macroeconomics Calculators
- Income Elasticity of Demand
- Cross-Price Elasticity of Demand
- Price Elasticity of Demand
- Price Elasticity of Supply
- Total Surplus
- Consumer Surplus
- Producer Surplus
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- GDP Deflator
- GDP by Income
- GDP Expenditure
- Net Capital Outflow
- Net Exports and Net Capital Outflow
- Dollar Conversion from Different Times
- Unemployment Rate (Friedman and Phelps)
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- Domestic Investment
- Unemployment Rate
- Inflation Rate in Year 2 (using CPI)
- Labor Force
- Labor-Force Participation Rate
- Net Exports
- Real Exchange Rate
- Currency Converter
- Midpoint Method for Price Elasticity of Demand
- Income Elasticity of Demand
- Simple Price Elasticity of Demand
The Math / Science
The formula for Income Elasticity of Demand is:
IED = CD / CI
where:
- IED is the income elasticity of demand
- CD is the percent change in quantity of demand
- CI is the percent change in income.
The Income Elasticity of Demand formula computes the ratio of change in demand over change in consumer income. Income Elasticity of Demand measures how the demand of a product or service changes with changes in consumer income. This is calculated by taking the percentage change in the demand quantity and dividing by the percentage change in income. Note: the Income Elasticity of Demand is rounded to the nearest 1/1,000th.
Reference:
- Mankiw, N. Gregory. "Chapter 5:Other Demand Elasticities." Principles of Macroeconomics. 6th ed. Mason, OH: Thomson/South-Western, 2004. 97. Print.
- “Chapter 7 Consumer Choice and Elasticity.” AP Microeconomics 2018, by Eric R. Dodge, McGraw Hill Education, 2017.
