Estimating Demand Elasticities in a Differentiated Product Industry PDF Download

Author: Joanna Stavins
Publisher:
ISBN:
Category : Supply and demand
Languages : en
Pages : 50

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Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 88

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Book Description
Chapter 1 proposes a moment inequality approach to estimating random utility models when consumers consideration sets are unobservable to econometricians. I show that, without relying on a specific model of consideration set formation, the random utility model can be identified and estimated via a system of conditional moment inequalities derived from the utility maximization assumption. I apply the moment inequality approach to study whether attention inertia can explain some of the observed persistence in consumers brand choices, as opposed to alternative explanations in terms of preference, e.g., state-dependent utilities. The estimation results, obtained using household scanner data, show that up to twenty percent of the observed persistence, in terms of re-purchase probability, can be attributed to the fact that previous purchase of a brand increases its present consideration probability. Chapter 2 introduces a new approach to estimating differentiated product demand system that allows for error in market shares as measures of choice probabilities. In particular, our approach allows for products with zero sales in the data, which is a frequent phenomenon that arises in product differentiated markets but lies outside the scope of existing demand estimation techniques. We use our approach to study consumer demand from scanner data using the Dominicks Finer Foods database, and find that even for the baseline logit model, demand elasticities nearly double when the full error in market shares is taken into account.

Author: Giovanni Compiani
Publisher:
ISBN:
Category :
Languages : en
Pages : 70

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I develop and apply a nonparametric approach to estimate demand in differentiated products markets. Estimating demand flexibly is key to addressing many questions in economics that hinge on the shape - and notably the curvature - of market demand functions. My approach applies to standard discrete choice settings, but accommodates a broader range of consumer behaviors and preferences, including complementarities across goods, consumer inattention, and consumer loss aversion. Further, no distributional assumptions are made on the unobservables and only limited functional form restrictions are imposed. Using California grocery store data, I apply my approach to perform two counterfactual exercises: quantifying the pass-through of a tax, and assessing how much the multi-product nature of sellers contributes to markups. In both cases, I find that estimating demand flexibly has a significant impact on the results relative to a standard random coefficients discrete choice model, and I highlight how the outcomes relate to the estimated shape of the demand functions.

Author: Gregory Werden
Publisher:
ISBN:
Category : Antitrust law
Languages : en
Pages : 66

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Author: Robert Stanton McMillan
Publisher:
ISBN:
Category :
Languages : en
Pages : 336

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Author: Li-Yu Ma
Publisher:
ISBN:
Category :
Languages : en
Pages : 330

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Author: Gregory Werden
Publisher:
ISBN:
Category : Consolidation and merger of corporations
Languages : en
Pages : 42

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Author: Robert C. Feenstra
Publisher:
ISBN:
Category : Prices
Languages : en
Pages : 32

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Author: Zhiqi Chen
Publisher: McGill-Queen's Press - MQUP
ISBN: 0773585885
Category : Business & Economics
Languages : en
Pages : 600

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Using state-of-the-art empirical techniques, contributors address the policy challenges raised by globalization, the internet and other technological advances, innovation, and the rise of security measures in response to the 9/11 terrorist attacks. Chapters are organized around five themes: recent developments and policy challenges, Canadian firms in the information age, research and development and innovation, regulation and industrial performance, and securing trade and investment opportunities. The only substantive research volume on this subject in two decades, Industrial Organization in Canada is a welcome resource for policy makers, researchers, and academics concerned with industrial policy issues in contemporary Canada. Contributors include Ajay Agrawal (University of Toronto), Doug Allen (Simon Fraser University), Werner Antweiler (University of British Columbia), John Baldwin (Statistics Canada), Zhiqi Chen (Carleton University), Jean-Étienne de Bettignies (Queen's University), Marc Duhamel (Industry Canada), James Gaisford (University of Calgary), Avi Goldfarb (University of Toronto), Wulong Gu (Statistics Canada), Kathryn Harrison (University of British Columbia), Patrick Joly (Industry Canada), William Kerr (University of Saskatchewan), Kevin Koch (PricewaterhouseCoopers), Donald G. McFetridge (Carleton University), Peter W. B. Phillips (University of Saskatchewan), Mohammed Rafiquzzaman (Industry Canada), Someshwar Rao (Institute for Research on Public Policy), Thomas W. Ross (University of British Columbia), Camille Ryan (University of Saskatchewan), Michel Sabbagh (Industry Canada), Guofu Tan (University of Southern California), Henry Thille (Guelph University), Johannes Van Biesebroeck (K.U. Leuven, Belgium), and Lasheng Yuan (University of Calgary).

Author: Robert E. Baldwin
Publisher: University of Chicago Press
ISBN: 0226036510
Category : Business & Economics
Languages : en
Pages : 392

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Interest in U.S. trade policy has been stimulated in recent years by the massive American trade deficit, by the belief that intervention by foreign governments in international markets has given other countries a competitive edge over the United States, and by concern about the increase in protectionism among industrial countries. In turn, major analytical developments in international economics have revolutionized trade theory, broadening its scope both by introducing in a more formal manner such concepts as imperfect competition, increasing returns, product differentiation, and learning effects and by including the study of political and economic factors that shape trade policy decisions. This collection of papers—the result of a conference held by the NBER—applies these "new" trade theories to existing world cases and also presents complementary empirical studies that are grounded in more traditional trade theories. The volume is divided into four parts. The papers in part 1 consider the problem of imperfect competition, empirically assessing the economic effect of various trade policies introduced in industries in which the "new" trade theory seems to apply. Those in part 2 isolate the effects of protection from the influences of the many economic changes that accompany actual periods of protection and also examine how the effects from exogenous changes in economic conditions vary with the form of protection. Part 3 provides new empirical evidence on the effect of foreign production by a country's firms on the home country's exports. Finally, in part 4, two key bilateral issues are analyzed: recent U.S.-Japanese trade tensions and the incident involving the threat of the imposition of countervailing duties by the United States on Canadian softwood lumber.