Demand Estimation Under Incomplete Product Availability

Christopher Conlon and Julie Mortimer

No 14315, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Incomplete product availability is an important feature of many markets; ignoring changes in availability may bias demand estimates. We study a new dataset from a wireless inventory system installed on 54 vending machines to track product availability every four hours. The data allow us to account for product availability when estimating demand, and provides a valuable source of variation for identifying substitution patterns. We develop a procedure that allows for changes in product availability even when availability is only observed periodically. We find significant differences in demand estimates, with the corrected model predicting significantly larger impacts of stock-outs on profitability.

JEL-codes: L0 (search for similar items in EconPapers)
Date: 2008-09
New Economics Papers: this item is included in nep-mst
Note: IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Published as Christopher T. Conlon & Julie Holland Mortimer, 2013. "Demand Estimation under Incomplete Product Availability," American Economic Journal: Microeconomics, American Economic Association, vol. 5(4), pages 1-30, November.

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Related works:
Journal Article: Demand Estimation under Incomplete Product Availability (2013)
Working Paper: Demand Estimation Under Incomplete Product Availability (2012)
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