Bounds on Willingness-to-Pay in a Pure-Characteristics Model of the Demand for Automobile Variants
Øyvind Thomassen
KU Leuven - Center for Economic Studies
April 2010
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.
Number of Pages in PDF File: 46
working papers series
Suggested Citation
Thomassen, Øyvind, Bounds on Willingness-to-Pay in a Pure-Characteristics Model of the Demand for Automobile Variants (April 2010). Available at SSRN: http://ssrn.com/abstract=1612212 or http://dx.doi.org/10.2139/ssrn.1612212
