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Medientyp:
E-Artikel
Titel:
Demand estimation with infrequent purchases and small market sizes
Beteiligte:
Hortaçsu, Ali;
Natan, Olivia R.;
Parsley, Hayden;
Schwieg, Timothy;
Williams, Kevin R.
Erschienen:
The Econometric Society, 2023
Erschienen in:
Quantitative Economics, 14 (2023) 4, Seite 1251-1294
Sprache:
Englisch
DOI:
10.3982/qe2147
ISSN:
1759-7323
Entstehung:
Anmerkungen:
Beschreibung:
We propose a demand estimation method that allows for a large number of zero‐ sale observations, rich unobserved heterogeneity, and endogenous prices. We do so by modeling small market sizes through Poisson arrivals. Each of these arriving consumers solves a standard discrete choice problem. We present a Bayesian IV estimation approach that addresses sampling error in product shares and scales well to rich data environments. The data requirements are traditional market‐level data as well as a measure of market sizes or consumer arrivals. After presenting simulation studies, we demonstrate the method in an empirical application of air travel demand.