1. Complete Pass-Through
Assumes the entire tariff cost is passed directly to consumers. This is the simplest but least realistic approach.
$2.40
New Price = Original Price × (1 + Tariff Rate)
2. Elasticity-Based Model
Uses supply and demand elasticities to determine how much of the tariff is absorbed by importers vs. passed to consumers.
$2.32
Pass-through rate: 80%
3. Market Structure Adjustment
Considers market concentration and competitive dynamics. More competitive markets absorb more tariff costs.
$2.28
Adjusted for market competition effects
4. Substitution Effect Model
Accounts for availability of domestic alternatives. Higher substitutability leads to lower price increases.
$2.25
Substitution factor: 0.7
5. Empirical Average (75% Rule)
Based on historical data showing that tariffs typically result in 60-90% pass-through, with 75% as the average.
$2.30
Historical average pass-through rate
6. Composite Model
Combines multiple factors including elasticity, market structure, and substitutability for a comprehensive estimate.
$2.27
Weighted average of all methods