Demand Model Simulation in R with Endogenous Prices and Unobservable Quality

Daniel Toro González ()

MPRA Paper from University Library of Munich, Germany

Abstract: The aim of the present routine is to simulate a demand equation with endogenous prices and unobservable product quality and to retrieve the original parameters using the Control Function (CF) approach. The CF approach is a very useful and simple method to obtain unbiased estimates. The present R code helps to understand the underlying structure of the endogeneity problem in demand estimations. Results support the important bias correction of the CF approach.

Keywords: R; Control Function; Demand Analisis; Endogeneity (search for similar items in EconPapers)
JEL-codes: C13 C15 D49 E27 (search for similar items in EconPapers)
Date: 2014-09-18
New Economics Papers: this item is included in nep-cmp, nep-com and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:59117

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