Measuring Product Diversity

Posted: 19 Mar 1997

See all articles by Joshua S. Gans

Joshua S. Gans

University of Toronto - Rotman School of Management; NBER

Robert J. Hill

UNSW Australia Business School, School of Economics

Date Written: February 1997

Abstract

This paper demonstrates the possibility of constructing a measure of product diversity using observed price and quantity data. We do this by positing a utility function, where utility depends on bilateral distance between products. We show how these unobserved parameters can be inferred from price and quantity data. These parameters are then used to construct a diversity measure satisfying the axioms developed by Weitzman for diversity in environmental contexts.

JEL Classification: L15

Suggested Citation

Gans, Joshua S. and Hill, Robert James, Measuring Product Diversity (February 1997). Available at SSRN: https://ssrn.com/abstract=4751

Joshua S. Gans (Contact Author)

University of Toronto - Rotman School of Management ( email )

Canada

HOME PAGE: http://www.joshuagans.com

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Robert James Hill

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia

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