Chipotle wants to run an experiment to estimate the demand


Chipotle wants to run an experiment to estimate the demand elasticity for its customers who consume pork burritos. Chipotle raises the price of pork burritos 5% in half of its restaurants, but keeps the price of pork burritos unchanged in the other half. After a month, sales of pork burritos are down 7.5% in the restaurants that increased price, while sales of pork burritos are down 2% in the restaurants that didn’t increase price (note: these numbers are changes, i.e. the difference between before and after). What is the difference-in-difference estimate of the demand elasticity?

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Business Economics: Chipotle wants to run an experiment to estimate the demand
Reference No:- TGS01417542

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