Demand Estimation Under Incomplete Product Availability
Christopher Conlon and
Julie Mortimer
No 799, Boston College Working Papers in Economics from Boston College Department of Economics
Abstract:
Incomplete product availability is an important feature of many markets, and ignoring changes in availability may bias demand estimates. We study a new dataset from a wireless inventory system on vending machines to track product availability every four hours. The data allow us to account for product availability when estimating demand, and provide valuable variation for identifying substitution patterns when products stock out. We develop a procedure that allows for changes in product availability when availability is only observed periodically. We find significant differences in demand estimates: the corrected model predicts significantly larger impacts of stock-outs on profitability.
Keywords: demand estimation; product availability; EM algorithm; field experiment (search for similar items in EconPapers)
JEL-codes: C23 C25 C8 L8 L81 (search for similar items in EconPapers)
Date: 2010-05-03, Revised 2012-08-07
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Citations: View citations in EconPapers (24)
Published in American Economic Journal: Microeconomics, 2013, 5:4, 1-3
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Related works:
Journal Article: Demand Estimation under Incomplete Product Availability (2013)
Working Paper: Demand Estimation Under Incomplete Product Availability (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:799
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