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Author: | Benassi, C. Chirco, A. Scrimitore, M. |
Title: | Income concentration and market demand |
Journal: | Oxford Economic Papers
2002 : OCT, VOL. 54:4, p. 584-596 |
Index terms: | Markets Demand Incomes Models |
Language: | eng |
Abstract: | This paper analyzes the effects of income concentration and income dispersion on market demand and its elasticity. It is shown that, following an increase in income concentration towards the middle, the increase in demand faced by firms which serve at the margin middle income consumers, is associated with an increase in price elasticity, accordingly, the positive effects of the size of the market becoming wider are amplified by a higher degree of competition. The results hold for a large number of possible income distributions. |
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