Econometric Modeling of Differential Durable Goods Markets: an Application to Telephone

J. Foncel and Marc Ivaldi

Working Papers from Toulouse - GREMAQ

Abstract: As the structure of consumer preferences plays a crucial role in the analysis of differentiated product markets, estimation of demand systems is a sensitive task. This paper contributes to this project in two ways. First, we develop a method to deal with the simultaneous choice of an equipment and a level of usage. This question is crucial for durable goods. Second, our method is suited for households, i.e., micro data. The main feature of our method is to specify a direct utility function, which provides correct substitution patterns among products at the aggregate level, i.e., compatible with the intuition.

Keywords: ECONOMETRICS; ECONOMIC MODELS; DEMAND; CONSUMPTION (search for similar items in EconPapers)
JEL-codes: C00 C50 D11 (search for similar items in EconPapers)
Pages: 30 pages
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:fth:gremaq:99.527

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