How Reliable Is It to Obtain Price Flexibilities from Inverting Price Elasticities?

Food price elasticities and flexibilities are widely used in agricultural policy and program analyses. Most agricultural economists take the reciprocal of a directly estimated elasticity, or more rigorously the inversion of an elasticity matrix at the retail level, as flexibility measures. Conceptual discussion and empirical evidence are provided to assess the reliability of this common practice of obtaining flexibility measures by inverting a matrix of directly estimated elasticities.