Cross-Price Elasticity (XED) Calculator

Cross-price elasticity of demand (XED) measures how responsive the quantity demanded of one good (X) is to a change in the price of another good (Y). The formula is: XED = (% change in quantity of X) / (% change in price of Y). A positive value means the two goods are substitutes, a negative value means complements, and a value near zero means independent (unrelated).

This calculator uses the midpoint formula (arc elasticity): each percent change is computed against the average of the start and end values, not the start value alone. For the price of Y from Rp20,000 to Rp22,000: (2,000/21,000) x 100% = 9.5238%. For the quantity of X from 100 to 115: (15/107.5) x 100% = 13.9535%. XED = 13.9535 / 9.5238 = 1.4651. The simple start-value-based formula gives (15/100)/(2,000/20,000) = 15%/10% = 1.5. The midpoint advantage: the result is the same whether the price rises or falls.

XED above 0: substitute goods; the larger the value, the stronger the substitution. XED below 0: complementary goods; the more negative, the stronger the link. XED near 0: independent goods. An absolute value above 1 means elastic (responsive), below 1 means inelastic (less responsive), and equal to 1 means unitary.

Use the midpoint formula when comparing two discrete data points (e.g. the price before and after), because the result is symmetric: up or down gives the same number. Use the point formula (percent change against the start value) when the change is very small or when your textbook explicitly asks for it.

XED is a descriptive analysis tool, not a forecasting or pricing advisor. An XED value computed from historical data describes a past relationship assuming other factors stay constant (ceteris paribus); real markets are influenced by many factors at once. Use this calculator’s results for learning and exploration, not as the sole basis for pricing decisions.