Why doesn Trefis account for elasticity?
We’ve deliberately chosen not to make forecasts interdependent – e.g. adjustments to pricing automatically leading to changes in market share. The primary reason for doing so was to make the behavior of our analysis more understandable and predictable for users that may not be expecting forecast inter-dependencies. As it stands, it’s up to the user to judge whether pricing decreases will lead to market share increases and what the elasticity is between the two variables. It could also be that pricing decreases by a company are matched by competitors leading to, all other things being equal, no market share movement but changes in the overall market demand instead. You are encouraged to consider such possibilities when modifying Trefis forecasts. Trefis analysts do consider elasticity as a qualitative factor that influences how we forecast.
