The elasticity of demand and its role in consumer behaviour determination: A comparative analysis of Europe and the USA

Determination of consumer behaviour is relevant for ensuring the effective functioning of both individual companies and the country. Given this, additional research on instruments that describe it, such as demand elasticity, remains important. The study aimed to analyse the elasticity of demand in Europe and the United States of America. As part of the study, a statistical assessment of the price indicators for certain types of products, namely oil (from 1989 to 2023), milk (from 2001 to 2022) and chicken meat (from 1991 to 2022), as well as changes in the level of consumption of these products, was conducted. Based on the calculated and analysed demand elasticity indicators, the study concluded that price is not the only and main factor in changing demand for products. The most striking instance was the situation with chicken, the price and demand for which increased significantly, primarily due to the transition of the population to a more responsible and healthy diet. At the same time, the elasticity of oil demand for the United States of America was stable and close to zero, while for European countries it was negative, due to their significant dependence on energy imports, including oil, which contributes to a faster transition to alternative energy sources. In the case of milk, the elasticity varied depending on where the assessment was conducted: in the United States or Europe. The results will allow for more effective policymaking in this area and create new opportunities for the development of local companies