Download or read book Nonparametric Demand Estimation in the Presence of Unobserved Factors written by Sandeep Chitla and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In many applications of discrete choice modeling, there exist unobserved factors (UFs) driving the consumer demand that are not included in the model. Ignoring such UFs when fitting the choice model can produce biased parameter estimates and ultimately lead to incorrect policy decisions. At the same time, accounting for UFs during estimation is challenging since we typically have only partial or indirect information about them. Existing approaches such as the classical BLP estimator make strong parametric assumptions to deal with this challenge, and therefore can suffer from model misspecification issues. We propose a novel estimator for dealing with UFs in the mixtures of logit model that is { em nonparametric}, i.e., does not impose any parametric assumptions on the mixing distribution or the underlying mechanism generating the UFs. We theoretically characterize the benefit of using our estimator over the BLP estimator. We then leverage the alternating minimization framework to design an efficient algorithm for implementing our proposed estimator and establish its sublinear convergence to a stationary point of the estimation problem. Using a simulation study, we demonstrate that our estimator is robust to different ground-truth settings, whereas the performance of the BLP estimator suffers significantly under model misspecification. Using real-world grocery sales transaction data, we show that accounting for product and store-level UFs can significantly improve the accuracy of predicting weekly demand at an individual product and store level, with an avg. 57% improvement across 12 product categories over a state-of-the-art benchmark that ignores UFs during estimation.
Download or read book Nonparametric Demand Estimation in Differentiated Products Markets written by Giovanni Compiani and published by . This book was released on 2018 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt: I develop and apply a nonparametric approach to estimate demand in differentiated products markets. Estimating demand flexibly is key to addressing many questions in economics that hinge on the shape - and notably the curvature - of market demand functions. My approach applies to standard discrete choice settings, but accommodates a broader range of consumer behaviors and preferences, including complementarities across goods, consumer inattention, and consumer loss aversion. Further, no distributional assumptions are made on the unobservables and only limited functional form restrictions are imposed. Using California grocery store data, I apply my approach to perform two counterfactual exercises: quantifying the pass-through of a tax, and assessing how much the multi-product nature of sellers contributes to markups. In both cases, I find that estimating demand flexibly has a significant impact on the results relative to a standard random coefficients discrete choice model, and I highlight how the outcomes relate to the estimated shape of the demand functions.
Download or read book Using nonparametric methods to improve parametric demand estimation in the presence of binding non negativity constraints with application to agribusiness management written by Jay M. Lillywhite and published by . This book was released on 2003 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Demand Estimation with Heterogeneous Consumers and Unobserved Product Characteristics written by Patrick Bajari and published by . This book was released on 2001 with total page 80 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the identification and estimation of preferences in hedonic discrete choice models of demand for differentiated products. In the hedonic discrete choice model, products are represented as a finite dimensional bundle of characteristics, and consumers maximize utility subject to a budget constraint. Our hedonic model also incorporates product characteristics that are observed by consumers but not by the economist. We demonstrate that, unlike the case where all product characteristics are observed, it is not in general possible to uniquely recover consumer preferences from data on a consumer's choices. However, we provide several sets of assumptions under which preferences can be recovered uniquely, that we think may be satisfied in many applications. Our identification and estimation strategy is a two stage approach in the spirit of Rosen (1974). In the first stage, we show under some weak conditions that price data can be used to nonparametrically recover the unobserved product characteristics and the hedonic pricing function. In the second stage, we show under some weak conditions that if the product space is continuous and the functional form of utility is known, then there exists an inversion between a consumer's choices and her preference parameters. If the product space is discrete, we propose a Gibbs sampling algorithm to simulate the population distribution of consumers' taste coefficients.
Download or read book Demand Estimation with Unobserved Choice Set Heterogeneity written by Gregory S. Crawford and published by . This book was released on 2016 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: We present a method to estimate preferences in the presence of unobserved choice set heterogeneity. We build on the insights of Chamberlain's Fixed-Effect Logit and exploit information in observed purchase decisions in either panel or cross-section environments to construct "sufficient sets" of choices that lie within consumers' true but unobserved choice sets. This allows us to recover preference parameters without having to specify the process of choice set formation. We illustrate our ideas by estimating demand for chocolate bars on-the-go using individual-level data from the UK. Our results show that failing to account for unobserved choice set heterogeneity can lead to statistically and economically significant biases in the estimation of preference parameters.
Download or read book Semi nonparametric Estimation and Testing of Consumer Demand Systems written by Ying Li and published by . This book was released on 1993 with total page 158 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Nonparametric Estimation of Demand Elasticities Using Panel Data written by Stefan Hoderlein and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Handbook of Industrial Organization written by and published by Elsevier. This book was released on 2021-12-09 with total page 788 pages. Available in PDF, EPUB and Kindle. Book excerpt: Handbook of Industrial Organization, Volume Four highlights new advances in the field, with this new volume presenting interesting chapters written by an international board of expert authors. Presents authoritative surveys and reviews of advances in theory and econometrics Reviews recent research on capital raising methods and institutions Includes discussions on developing countries
Download or read book Essays on Estimating Consumer Demand written by In-Sik Min and published by . This book was released on 2003 with total page 190 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book DEMAND ESTIMATION WITH HETEROGENOUS CONSUMERS AND UNOBSERVED PRODUCT CHARACTERISTICS A HEDONIC APPROACH written by Patrick BAJARI and published by . This book was released on 2001 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Identification and Estimation in Discrete Choice Demand Models when Endogenous Variables Interact with the Error written by Amit Gandhi and published by . This book was released on 2011 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: We develop an estimator for the parameters of a utility function that has interactions between the unobserved demand error and observed factors including price. We show that the Berry (1994)/Berry, Levinsohn, and Pakes (1995) inversion and contraction can still be used to recover the mean utility term that now contains both the demand error and the interactions with the error. However, the instrumental variable (IV) solution is no longer consistent because the price interaction term is correlated with the instrumented price. We show that the standard conditional moment restrictions (CMRs) do not generally suffice for identification. We supplement the standard CMRs with new moments that we call â??generalizedâ?? control function moments and we show together they are sufficient for identification of all of the demand parameters. A major advantage of our setup is that it requires little more than the existence of the same instruments used in this standard IV setting. We run several monte carlos that show our approach works when the standard IV approaches fail because of non-separability. We also test and reject additive separability in the original Berry, Levinsohn, and Pakes (1995) automobile data, and we show that demand becomes significantly more elastic when the correction is applied
Download or read book Econometric Models For Industrial Organization written by Matthew Shum and published by World Scientific. This book was released on 2016-12-14 with total page 154 pages. Available in PDF, EPUB and Kindle. Book excerpt: Economic Models for Industrial Organization focuses on the specification and estimation of econometric models for research in industrial organization. In recent decades, empirical work in industrial organization has moved towards dynamic and equilibrium models, involving econometric methods which have features distinct from those used in other areas of applied economics. These lecture notes, aimed for a first or second-year PhD course, motivate and explain these econometric methods, starting from simple models and building to models with the complexity observed in typical research papers. The covered topics include discrete-choice demand analysis, models of dynamic behavior and dynamic games, multiple equilibria in entry games and partial identification, and auction models.
Download or read book Flexible Demand Estimation with Search Data written by Tomomichi Amano and published by . This book was released on 2022 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: Traditional methods for estimating demand are not always well-suited to online markets, where individual products are sold infrequently, unobserved factors such as webpage layout drive substitution, and often only a limited set of product characteristics is observed. We propose a demand model where browsing data -- which is abundant in many online settings -- is used to infer individual consumers' consideration sets. In our model, the underlying variables which drive consideration can be correlated arbitrarily across products. We estimate the model through a constraint maximization approach, based on the insight that these correlations should rationalize the product-pair co-search frequencies that are observed in the data. In turn, these correlations make it possible to estimate more flexible substitution patterns. We apply the model to data from an online retailer, recover the elasticity matrix, and solve for optimal prices.
Download or read book Discrete Choice Methods with Simulation written by Kenneth Train and published by Cambridge University Press. This book was released on 2009-07-06 with total page 399 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book describes the new generation of discrete choice methods, focusing on the many advances that are made possible by simulation. Researchers use these statistical methods to examine the choices that consumers, households, firms, and other agents make. Each of the major models is covered: logit, generalized extreme value, or GEV (including nested and cross-nested logits), probit, and mixed logit, plus a variety of specifications that build on these basics. Simulation-assisted estimation procedures are investigated and compared, including maximum stimulated likelihood, method of simulated moments, and method of simulated scores. Procedures for drawing from densities are described, including variance reduction techniques such as anithetics and Halton draws. Recent advances in Bayesian procedures are explored, including the use of the Metropolis-Hastings algorithm and its variant Gibbs sampling. The second edition adds chapters on endogeneity and expectation-maximization (EM) algorithms. No other book incorporates all these fields, which have arisen in the past 25 years. The procedures are applicable in many fields, including energy, transportation, environmental studies, health, labor, and marketing.
Download or read book Nonparametric Estimation of Exact Consumers Surplus and Deadweight Loss written by Jerry A. Hausman and published by . This book was released on 1992 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: We apply nonparametric regression models to estimation of demand curves of the type most often used in applied research. From the demand curve estimators we derive estimates of exact consumers surplus and deadweight loss, that are the most widely used welfare and economic efficiency measures in areas of economics such as public finance. We also develop tests of the symmetry and downward sloping properties of compensated demand. We work out asymptotic normal sampling theory for kernel and series nonparametric estimators, as well as for the parametric case. The paper includes an application to gasoline demand. Empirical questions of interest here are the shape of the demand curve and the average magnitude of welfare loss from a tax on gasoline. In this application we compare parametric and nonparametric estimates of the demand curve, calculate exact and approximate measures of consumers surplus and deadweight loss, and give standard error estimates. We also analyze the sensitivity of the welfare measures to components of nonparametric regression estimators such as the number of terms in a series approximation.
Download or read book Nonparametric Econometrics written by Qi Li and published by Princeton University Press. This book was released on 2011-10-09 with total page 769 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive, up-to-date textbook on nonparametric methods for students and researchers Until now, students and researchers in nonparametric and semiparametric statistics and econometrics have had to turn to the latest journal articles to keep pace with these emerging methods of economic analysis. Nonparametric Econometrics fills a major gap by gathering together the most up-to-date theory and techniques and presenting them in a remarkably straightforward and accessible format. The empirical tests, data, and exercises included in this textbook help make it the ideal introduction for graduate students and an indispensable resource for researchers. Nonparametric and semiparametric methods have attracted a great deal of attention from statisticians in recent decades. While the majority of existing books on the subject operate from the presumption that the underlying data is strictly continuous in nature, more often than not social scientists deal with categorical data—nominal and ordinal—in applied settings. The conventional nonparametric approach to dealing with the presence of discrete variables is acknowledged to be unsatisfactory. This book is tailored to the needs of applied econometricians and social scientists. Qi Li and Jeffrey Racine emphasize nonparametric techniques suited to the rich array of data types—continuous, nominal, and ordinal—within one coherent framework. They also emphasize the properties of nonparametric estimators in the presence of potentially irrelevant variables. Nonparametric Econometrics covers all the material necessary to understand and apply nonparametric methods for real-world problems.
Download or read book Dissertation Abstracts International written by and published by . This book was released on 2005 with total page 648 pages. Available in PDF, EPUB and Kindle. Book excerpt:
