The Efect of Differences in Buyer and Non-Buyer Characteristics on Equilibrium Price-Elasticities: an Empirical Study on the Italian Automobile Market

Franco Mariuzzo
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Franco Mariuzzo: Department of Economics, Trinity College

Economic Papers from Trinity College Dublin, Economics Department

Abstract: This paper provides an empirical analysis of own- and cross-price elasticities of substitution for the 1989-2000 Italian automobile industry. We use product-level data consistent with a structural model of equilibrium in a differentiated products oligopolistic industry and follow a random coefficient model to get reliable price elasticities of substitution. We enrich our data with a special section having information on individuals buying and non-buying vehicles. Tracking the di?erent characteristics of individuals buying and non-buying ends to be determinant for more precise estimations. Our data show that models that disregard this refined information tend to consistently overestimate price elasticities.

JEL-codes: L11 L62 (search for similar items in EconPapers)
Date: 2005-08
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Citations: View citations in EconPapers (2)

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Working Paper: The Efect of Differences in Buyer and Non-Buyer Characteristics on Equilibrium Price-Elasticities: an Empirical Study on the Italian Automobile Market (2005)
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