IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v73y2025i1p186-233.html
   My bibliography  Save this article

Demand Estimation with Flexible Income Effect: An Application to Pass‐Through and Merger Analysis

Author

Listed:
  • Shuhei Kaneko
  • Yuta Toyama

Abstract

This article proposes a semiparametric discrete choice model that incorporates a nonparametric specification for income effects. The model allows for the flexible estimation of demand curvature, which has significant implications for pricing and policy analysis in oligopolistic markets. Our estimation algorithm adopts a method of sieve approximation with shape restrictions in a nested fixed‐point algorithm. Applying this framework to the Japanese automobile market, we conduct a pass‐through analysis of feebates and merger simulations. Our model predicts a higher pass‐through rate and more significant merger effects than parametric demand models, highlighting the importance of flexibly estimating demand curvature.

Suggested Citation

  • Shuhei Kaneko & Yuta Toyama, 2025. "Demand Estimation with Flexible Income Effect: An Application to Pass‐Through and Merger Analysis," Journal of Industrial Economics, Wiley Blackwell, vol. 73(1), pages 186-233, March.
    • Handle: RePEc:bla:jindec:v:73:y:2025:i:1:p:186-233
    DOI: 10.1111/joie.12406
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/joie.12406
    Download Restriction: no
    File URL: https://libkey.io/10.1111/joie.12406?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:73:y:2025:i:1:p:186-233. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.