Confidence Intervals for Elasticities and Flexibilities: Re-Evaluating the Ratios of Normals Case

Many important hypotheses in applied economics depend upon the magnitude of estimated elasticities or flexibilities. However, their statistical properties are unknown for many popular models, making standard statistical inference impossible. This problem is addressed in the present paper which analyzes and evaluates alternative methods of constructing confidence intervals for elasticities and flexibilities. The methods studied include three bootstrap-based approaches, an approximation based on a Taylor's series expansion, and approaches proposed by Fieller and Scheff�. Results show that all method's except Scheff�'s worked