Using Machine Learning to Estimate Price Elasticity

Photo by Rebecca Matthews on Unsplash

During the final semester of my grad school analytics program, I was tasked with estimating price elasticity for wine. At first glance, this seemed like a simple objective. In economics, I was taught that price elasticity is the percent change in demand given the percent change in price. All you have to do is look at quantity purchased at each price to determine price elasticity. Why would you even…