Automobile Prices in Market Equilibrium: Part I and Ii

93 Pages Posted: 27 Apr 2000 Last revised: 29 Aug 2010

See all articles by Steven Berry

Steven Berry

Yale University - Department of Economics; National Bureau of Economic Research (NBER); Yale University - Cowles Foundation

James A. Levinsohn

University of Michigan; National Bureau of Economic Research (NBER)

Ariel Pakes

National Bureau of Economic Research (NBER); Harvard University - Department of Economics

Date Written: January 1993

Abstract

This paper develops new techniques for empirically analyzing demand and supply in differentiated products markets and then applies these techniques to analyze equilibrium in the U.S. automobile industry. Our primary goal is to present a framework which enables one to obtain estimates of demand and cost parameters for a broad class of oligopolistic differentiated products markets. These estimates can be obtained using only widely available product-level and aggregate consumer-level data, and they are consistent with a structural model of equilibrium in an oligopolistic industry. When we apply the techniques developed here to the U.S. automobile market. we obtain cost and demand parameters for (essentially) all models marketed over a twenty year period.

Suggested Citation

Berry, Steven T. and Levinsohn, James A. and Pakes, Ariel, Automobile Prices in Market Equilibrium: Part I and Ii (January 1993). NBER Working Paper No. w4264. Available at SSRN: https://ssrn.com/abstract=227074

Steven T. Berry (Contact Author)

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James A. Levinsohn

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Ariel Pakes

National Bureau of Economic Research (NBER) ( email )

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United States

Harvard University - Department of Economics ( email )

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