When a good comprises only a small portion of the budget, the consumer can reduce the con- sumption of other goods when the price of the good increases. For example, most consumers spend very little on salt; a small increase in the price of salt would reduce quantity demanded very little since salt constitutes a small fraction of consumers' total budgets. Table 3-3 Selected Short- and Long-Term Own Price Elasticities Short-Term Own Long-Term Own Price Elasticity Market Price Elasticity Transportation -0.6 -0.7 -2.3 Alcohol and tobacco -0.3 -0.9 -3.5 Recreation -0.9 -2.9 Clothing SOURCE: M. R. Baye, D. W. Jansen, and J. W. Lee. "Advertising Effects in Complete Demand Systems, Applied Economics 24 (1992), pp. 1087-96.
