Base elasticity -1.4 (route)
multiplied by 1.25 (intra South America)
multiplied by 1.1 (short-haul multiplier)
which equals -1.93
Proportion of the budget consumed by the item. • Products that consume a large portion of the consumer’s budget tend to have greater elasticity.
Time period considered. Elasticities tend to be greater • over the long run because consumers have more time to adjust their behaviour.
Whether the good or service is demanded as an input • into a final product or whether it is the final product. If the good or service is an input into a final product then the price elasticity for that good or service will depend on the price elasticity of the final product, its cost share in the production costs, and the availability of substitutes for that good or service.
Each of these general factors, along with the specific characteristics of the product, will interact to determine its overall responsiveness of demand to changes in prices and incomes.