Nonparametric Identification of Multinomial Choice Demand Models with Heterogeneous Consumers
Steven Berry () and
No 1718, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University
We consider identification of nonparametric random utility models of multinomial choice using "micro data," i.e., observation of the characteristics and choices of individual consumers. Our model of preferences nests random coefficients discrete choice models widely used in practice with parametric functional form and distributional assumptions. However, the model is nonparametric and distribution free. It allows choice-specific unobservables, endogenous choice characteristics, unknown heteroskedasticity, and high-dimensional correlated taste shocks. Under standard "large support" and instrumental variables assumptions, we show identifiability of the random utility model. We demonstrate robustness of these results to relaxation of the large support condition and show that when it is replaced with a weaker "common choice probability" condition, the demand structure is still identified. We show that key maintained hypotheses are testable.
Keywords: Nonparametric identification; Discrete choice demand; Differentiated products (search for similar items in EconPapers)
JEL-codes: C35 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-dcm, nep-ecm, nep-mic and nep-mkt
Date: 2009-09, Revised 2010-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17) Track citations by RSS feed
Downloads: (external link)
Working Paper: Nonparametric Identification of Multinomial Choice Demand Models with Heterogeneous Consumers (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cwl:cwldpp:1718
Ordering information: This working paper can be ordered from
Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
The price is None.
Access Statistics for this paper
More papers in Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University Yale University, Box 208281, New Haven, CT 06520-8281 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Matthew Regan ().