Demand estimation with heterogeneous consumers and unobserved product characteristics
Subtitle: a hedonic approach
By: C. Lanier Benkard, Patrick Bajari.
Contributors: Bajari, Patrick L.; National Bureau of Economic Research.
Series: NBER working paper series ;; working paper 10278; Working paper series (National Bureau of Economic Research : Online) ;; working paper no. 10278.
Publisher: National Bureau of Economic Research
Published: 2004
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Subjects: Demand (Economic theory)
Description: "We study the identification and estimation of Gorman-Lancaster style hedonic models of demand for differentiated products for the case when one product characteristic is not observed.  Our identification and estimation strategy is a two-step approach in the spirit of Rosen (1974).  Relative to Rosen's approach, we generalize the first stage estimation to allow for a single dimensional unobserved product characteristic, and also allow the hedonic pricing function to have a general, non-additive structure.  In the second stage, if the product space is continuous and the functional form of utility is known then there exists an inversion between the consumer's choices and her preference parameters.  This inversion can be used to recover the distribution of random coefficients nonparametrically.  For the more common case when the set of products is finite, we use the revealed preference conditions from the hedonic model to develop a Gibbs sampling estimator for the distribution of random coefficients.  We apply our methods to estimating personal computer demand"--National Bureau of Economic Research web site.
Notes: Includes bibliographical references.
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