The IPS property
By: Thomas J. Steenburgh
Contributors: Harvard Business School. Division of Research
Series: Working paper / Division of Research, Harvard Business School -- 05-022; Working paper (Harvard Business School. Division of Research) -- 05-022
Publisher: Division of Research, Harvard Business School
Published: 2004
Place of publication: Boston
Language: eng
Number of pages: 16
Subjects: Econometric models
Description: This article introduces the invariant proportion of substitution (IPS) property. The IPS property holds when the proportion of demand that is created by substitution away from a competing alternative is the same regardless of which of the enhanced good's attributes is improved. Since this property arises from assumption about the representative utility rather than the assumptions about the unobserved component of utility, models that break the independence of irrelevant alternatives (IIA) property, such as the nested logit and probit models, do not necessarily also break the IPS property. Some models that do break the IPS property are discussed.
Notes: "30 September 2004"--Added t.p.

Includes bibliographical references.