Bounds on Willingness-to-Pay in a Pure-Characteristics Model of the Demand for Automobile Variants
KU Leuven - Center for Economic Studies
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: 46working papers series
Date posted: May 20, 2010
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