Both presented mechanisms have been modelled in the two income scenarios. The first
one, income elasticity scenario shows the effect of elasticity exceeding unity on the
evolution of total spending over time. In practical terms, it is identical to the pure
demographic scenario except that the income elasticity of demand is equal to 1.1 in the
base year and converges in a linear manner to 1 by the end of projection horizon in 2060.
The elasticity coefficient at the beginning of the period has been chosen arbitrarily,
although taking account of empirical evidence on developments in this value over the
recent decades (see e.g. Getzen 2000) in light of which it can be considered as a
relatively conservative assumption.