A Practical Review of Methods to Estimate Overcharges Using Linear Regression

Roman Inderst and Christopher Milde

No 16900, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Arguably the most widely used techniques for estimating price overcharges from competition law infringements are the dummy variable and the forecasting approaches using linear regression analysis. While rarely used in practice, in this note we make use of the fully interacted dummy variable approach to review some basic properties of all three approaches. We show under which conditions and for which estimands of interest these approaches are equivalent and when they differ. We also note some interesting additional choices an interaction approach allows.

Keywords: Overcharge estimation; Forecasting; Dummy variable; Interactions; Interaction model; Treatment effects; Damages quantification (search for similar items in EconPapers)
JEL-codes: C20 K13 (search for similar items in EconPapers)
Date: 2022-01
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Working Paper: A Practical Review of Methods to Estimate Overcharges using Linear Regression (2019)
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