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Estimating a Differentiated Products Model with a Discrete/Continuous Choice and Limited Data

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  • Prentice, David

Abstract

This paper specifies a vertically differentiated products model for a product with a discrete/continuous choice. The model is easily estimated with the relatively limited data used in classical demand equation estimation, supplemented by readily available market characteristics data. The model, with some modifications, is estimated with a new dataset (by state and region) for the U.S. Portland cement industry. Plausible patterns of own and cross price elasticities are obtained. The role of market characteristics is estimated generalizing the applicability of the results to other markets and periods.

Suggested Citation

  • Prentice, David, 2000. "Estimating a Differentiated Products Model with a Discrete/Continuous Choice and Limited Data," MPRA Paper 28681, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:28681
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    References listed on IDEAS

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    1. Bresnahan, Timothy F., 1981. "Departures from marginal-cost pricing in the American automobile industry : Estimates for 1977-1978," Journal of Econometrics, Elsevier, vol. 17(2), pages 201-227, November.
    2. Robert E. Lipsey & Doris Preston, 1966. "Source Book of Statistics Relating to Construction," NBER Books, National Bureau of Economic Research, Inc, number lips66-1.
    3. Montgomery, Michael R., 1995. "'Time-to-build' completion patterns for nonresidential structures, 1961-1991," Economics Letters, Elsevier, vol. 48(2), pages 155-163, May.
    4. Davis, Peter, 2000. "Empirical models of demand for differentiated products," European Economic Review, Elsevier, vol. 44(4-6), pages 993-1005, May.
    5. Bresnahan, Timothy F, 1987. "Competition and Collusion in the American Automobile Industry: The 1955 Price War," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 457-482, June.
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    Cited by:

    1. Melitón Ramirez Mattos, 2005. "Econometric Model for Cement demand and supply in Bolivia," Econometrics 0508019, University Library of Munich, Germany.

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    More about this item

    Keywords

    Vertical Differentiation; Demand; Portland Cement; United States;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics
    • R34 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Input Demand Analysis

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