The consumer’s choice among television displays: A multinomial logit approach

Carlos Giovanni González Espitia and Natalia Serna

Lecturas de Economía, 2013, issue 79, 199-228

Abstract: The consumer’s choice over a bundle of products depends on observable and unobservable characteristics of goods and consumers. This choice is made in order to maximize utility subject to a budget constraint. At the same time, firms make product differentiation decisions to maximize profit. Quality is a form of differentiation. An example of this occurs in the TV market, where several displays are developed. Our objective is to determine the probability for a consumer of choosing a type of display from among five kinds: standard tube, LCD, plasma, projection and LED. Using a multinomial logit approach, we find that electronic appliances like DVDs and audio systems, as well as socioeconomic status, increase the probability of choosing a high-tech television display. Our empirical approximation contributes to further understanding rational consumer behavior through the theory of utility maximization and highlights the importance of studying market structure and analyzing changes in welfare and efficiency.

Keywords: Observable product characteristics; product differentiation; quality; television display (search for similar items in EconPapers)
JEL-codes: D12 L15 (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations:

Downloads: (external link)
http://aprendeenlinea.udea.edu.co/revistas/index.p ... cle/view/17954/15411 (application/pdf)

Related works:
Journal Article: The consumer’s choice among television displays: A multinomial logit approach (2013)
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:lde:journl:y:2013:i:79:p:199-228

Ordering information: This journal article can be ordered from
Lecturas de Economía, Departamento de Economía, Calle 67, 53-108, Medellin 050010, Colombia.

DOI: 10.17533/udea.le.n79a7

Access Statistics for this article

Lecturas de Economía is currently edited by Carlos Andrés Vasco Correa

More articles in Lecturas de Economía from Universidad de Antioquia, Departamento de Economía Contact information at EDIRC.
Bibliographic data for series maintained by Carlos Andrés Vasco Correa ().