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Demand Estimation with Availability Variation

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  • Hickman, William
  • Mortimer, Julie Holland

Abstract

Estimates of demand are identified from variation in the choice sets that consumers face and the corresponding purchase probabilities for individual products. Retail settings often provide an opportunity to observe variation in consumer choice sets that arises not only through changes in observable product characteristics, such as price, but also through changes in product availability. We review the literature that develops methods for estimating demand in these settings, with emphasis on two mechanisms through which product availability may vary: product assortment decisions, and stockout events. We also briefly discuss variation in availability that may arise from limited consumer information.

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  • Hickman, William & Mortimer, Julie Holland, 2016. "Demand Estimation with Availability Variation," SocArXiv qe69j, Center for Open Science.
    • Handle: RePEc:osf:socarx:qe69j
    DOI: 10.31219/osf.io/qe69j
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    Cited by:

    1. Crawford, Gregory S. & Griffith, Rachel & Iaria, Alessandro, 2021. "A survey of preference estimation with unobserved choice set heterogeneity," Journal of Econometrics, Elsevier, vol. 222(1), pages 4-43.
    2. Nikhil Agarwal & Paulo J. Somaini, 2022. "Demand Analysis under Latent Choice Constraints," NBER Working Papers 29993, National Bureau of Economic Research, Inc.
    3. Victor H. Aguiar & Nail Kashaev, 2019. "Identification and Estimation of Discrete Choice Models with Unobserved Choice Sets," Papers 1907.04853, arXiv.org, revised Jun 2021.

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