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The Efect of Differences in Buyer and Non-Buyer Characteristics on Equilibrium Price-Elasticities: an Empirical Study on the Italian Automobile Market

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  • Franco Mariuzzo

    (Department of Economics, Trinity College)

Abstract

This paper provides an empirical analysis of own- and cross-price elasticities of substitution for the 1989-2000 Italian automobile industry. We use product-level data consistent with a structural model of equilibrium in a differentiated products oligopolistic industry and follow a random coefficient model to get reliable price elasticities of substitution. We enrich our data with a special section having information on individuals buying and non-buying vehicles. Tracking the di?erent characteristics of individuals buying and non-buying ends to be determinant for more precise estimations. Our data show that models that disregard this refined information tend to consistently overestimate price elasticities.

Suggested Citation

  • Franco Mariuzzo, 2005. "The Efect of Differences in Buyer and Non-Buyer Characteristics on Equilibrium Price-Elasticities: an Empirical Study on the Italian Automobile Market," Trinity Economics Papers tep13, Trinity College Dublin, Department of Economics.
    • Handle: RePEc:tcd:tcduee:tep13
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    References listed on IDEAS

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    Cited by:

    1. Leheyda, Nina, 2008. "Geographical and Multi-product Linkages of Markets: Impact on Firm Equilibrium Interactions (Some Evidence from the European Car Market)," ZEW Discussion Papers 08-119, ZEW - Leibniz Centre for European Economic Research.
    2. Leheyda, Nina, 2008. "Private Incentives to Innovate: Interplay of New Products and Brand-Name Reputation," ZEW Discussion Papers 08-120, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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