Price and Income Elasticities in LAC Countries: The Importance of Domestic Production.

The inclusion of time in the household domestic production function allows to calculate full prices that are in turn used to estimate consistent monetary and time elasticities on micro cross-sectional data. This article provides elasticity estimates for different commodity groups in absence of observable price data, solving the persistent problem of price data availability in most developing countries. The estimated price elasticities perform well compared to other methods and can be computed for different sub-populations, which is important for policy design and the calibration of simulation models.