Calibrating the AIDS and Multinomial Logit Models with Observed Product Margins

Gloria Sheu and Charles Taragin
Additional contact information
Charles Taragin: Economic Analysis Group, Antitrust Division, U.S. Department of Justice

No 201207, EAG Discussions Papers from Department of Justice, Antitrust Division

Abstract: We show how observed product margins may be used in lieu of an observed market elasticity to calibrate parameters for two commonly used demand forms: the Almost Ideal Demand System (AIDS) and the multinomial logit. This technique is useful for antitrust practitioners interested in simulating the e ects of a merger, since estimates of product margins are often easier to obtain than estimates of market elasticities.

Keywords: demand calibration; multinomial logit; almost ideal demand system; AIDS (search for similar items in EconPapers)
JEL-codes: K21 L40 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2012-10
New Economics Papers: this item is included in nep-com and nep-ind
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.justice.gov/atr/public/eag/288189a.html (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:doj:eagpap:201207

Access Statistics for this paper

More papers in EAG Discussions Papers from Department of Justice, Antitrust Division Department of Justice Antitrust Division 450 Fifth Street NW Washington, DC 20530. Contact information at EDIRC.
Bibliographic data for series maintained by Tung Vu ().