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On aggregation bias in structural demand models

Author

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  • Lai, Pei-Chun
  • Bessler, David A.

Abstract

Consumer demand analysis attracts considerable attention. It remains an open question, however, whether estimating demand with aggregate data is reliable when disaggregate store-level data is given. Demand models may produce biased results when applied to data aggregated across stores with different pricing strategies. In this study, the graphical model is used to investigate the following question: Do we find the same structure when we fit causal models on sub-groupings of stores, as we find when we fit models on aggregate data from all stores?

Suggested Citation

  • Lai, Pei-Chun & Bessler, David A., 2010. "On aggregation bias in structural demand models," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61523, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea10:61523
    DOI: 10.22004/ag.econ.61523
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    File URL: https://ageconsearch.umn.edu/record/61523/files/11610-AAEA2010.pdf
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    Cited by:

    1. Jinyang Zheng & Zhengling Qi & Yifan Dou & Yong Tan, 2019. "How Mega Is the Mega? Exploring the Spillover Effects of WeChat Using Graphical Model," Information Systems Research, INFORMS, vol. 30(4), pages 1343-1362, December.

    More about this item

    Keywords

    Demand and Price Analysis;

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