Bounds on willingness-to-pay in a pure-characteristics model of the demand for automobile variants

Oyvind Thomassen

Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: I estimate a pure-characteristics discrete choice model of the demand for automobile engine and body style variants, using market-level data. Revealed preference bounds and imposed bounds on the willingness to pay for characteristics as a percentage of product price are sufficient to identify nonparametric taste distributions. Substitution patterns as determined by closest substitutes appear very realistic. The model can be estimated on a single cross-section of data.

Date: 2010-04
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Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:ces10.16

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