Chapter 6 — Further Reading

On elasticity in general

Alfred Marshall, Principles of Economics, 8th edition, 1920 Marshall introduced the concept of elasticity in Book III, Chapter IV of his Principles. The treatment is the original and remains surprisingly clear. Free online.

Paul Krugman and Robin Wells, Microeconomics, Worth Publishers The Krugman-Wells treatment of elasticity is one of the clearest in any modern textbook. Their chapter is more equation-light than ours and may be useful as a complement.

On the minimum wage debate (case study 1)

David Card and Alan Krueger, Myth and Measurement: The New Economics of the Minimum Wage, Princeton University Press, 1995 The book that changed the minimum wage debate. Card and Krueger present their New Jersey-Pennsylvania study and several other empirical analyses showing that moderate minimum wage increases have small or zero effects on employment. The book is technical but the introduction and conclusions are accessible.

David Card and Alan Krueger, "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, 1994 The original paper. Free in many archives.

David Neumark and William Wascher, Minimum Wages, MIT Press, 2008 The most thorough critical treatment of the Card-Krueger findings. Neumark and Wascher argue that more careful empirical work shows larger negative employment effects than Card and Krueger suggested. The book is the best defense of the standard view.

Arindrajit Dube, T. William Lester, and Michael Reich, "Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties," Review of Economics and Statistics, 2010 A more recent empirical study that uses neighboring counties on either side of state lines (one with a higher minimum wage, one with a lower) to estimate employment effects. Findings: small negative effects, consistent with the Card-Krueger framework.

Congressional Budget Office, The Effects on Employment and Family Income of Increasing the Federal Minimum Wage, multiple reports (2014, 2019, 2021) The CBO's official estimates of how minimum wage proposals would affect employment and incomes. Useful for seeing how a non-partisan agency thinks about the trade-offs. Free online at cbo.gov.

IGM Forum, "$15 Minimum Wage" poll, 2019 A survey of leading academic economists on the effects of a $15 federal minimum wage. The results show a meaningful split, with many uncertain or weakly opposed. Useful for understanding what professional consensus actually looks like (which is messier than headlines suggest).

On insulin pricing (case study 2)

Eli Y. Adashi, "Insulin Pricing: A Window into the Pharmaceutical Marketplace," American Journal of Medicine, 2020 A medical journal review of how insulin prices have evolved in the U.S., why they have risen, and what the policy options are.

Yale Diabetes Center, ongoing reports Yale has been one of the leading academic sources on insulin pricing. Reports are accessible on the Yale Medicine website.

Carolyn M. Mazzone et al., "Insulin Costs and Affordability: Why Are They Important?," Journal of the American Medical Association, 2022 A review of how insulin costs affect patient outcomes and adherence.

On gasoline elasticity

Carol A. Dahl, "Measuring Global Gasoline and Diesel Price and Income Elasticities," Energy Policy, 2012 A meta-analysis of gasoline elasticity estimates from many studies and many countries. Useful for getting a sense of the range of estimates and how they vary.

Lutz Kilian, "The Economic Effects of Energy Price Shocks," Journal of Economic Literature, 2008 A comprehensive review of how oil price shocks affect the economy. The chapter on elasticity is particularly relevant.

International Energy Agency, Energy Statistics Manual and various reports The IEA publishes the most authoritative international data on energy prices and consumption. Free online.

On the broader question of how elasticity shapes policy

Hal Varian, Intermediate Microeconomics: A Modern Approach, W. W. Norton, multiple editions Varian's intermediate textbook (a standard for undergraduate microeconomics majors) has the most thorough treatment of elasticity in any standard textbook. If you want to go deeper, his is the book.

Jonathan Gruber, Public Finance and Public Policy, Worth Publishers, multiple editions Gruber's public finance textbook applies elasticity throughout — to taxes, subsidies, public goods, externalities. A natural follow-up to Chapter 6.

Joel Slemrod and Jon Bakija, Taxing Ourselves, MIT Press, 2017 (5th edition) A general-audience book on how the U.S. tax system actually works, with elasticity-driven analysis throughout. Especially useful for understanding tax incidence in real-world contexts.

A reading order recommendation

If you have time for one of the books above, read Card and Krueger's Myth and Measurement. It is the most consequential single book in modern labor economics and the best introduction to how empirical work can challenge textbook assumptions.

If you want to develop your sense of how elasticity shapes policy in general, read Gruber's Public Finance and Public Policy. It is the textbook that takes elasticity from "an analytical concept" to "the basis of most real policy analysis."

Chapter 7 — Government Intervention — is next. You will see elasticity applied to the most contested microeconomic policy debates in the U.S. and around the world: rent control, minimum wage, taxes, subsidies. The chapter is one of the most useful in the book for becoming a more sophisticated reader of economic news.