Demand Models for Differentiated Goods with Complementarity and Substitutability

Mogens Fosgerau, André de Palma () and Julien Monardo
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Julien Monardo: CREST, ENS Paris-Saclay, University Paris-Saclay

No 18-02, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: We develop a class of demand models for differentiated products. The new models facilitate the BLP method (Berry et al., 1995) while numerical inversion of the demand system is not required. They can accommodate rich patterns of substitution and complementarity while being easily estimated with standard regression techniques and allowing very large choice sets. We use the new models to describe markets for differentiated products that exhibit segmentation according to several dimensions and illustrate their application by estimating demand for cereals in Chicago.

Keywords: Demand estimation; Differentiated products; Discrete choice; Generalized entropy; Representative consumer (search for similar items in EconPapers)
JEL-codes: C26 D11 D12 L (search for similar items in EconPapers)
Pages: 56 pages
Date: 2018-03-15
New Economics Papers: this item is included in nep-com and nep-dcm
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:1802

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