In this chapter, we describe how random utility maximization (RUM) discrete choice models are used to estimate the demand for commodity attributes in quality-differentiated goods. After presenting a conceptual overview, we focus specifically on the conditional logit model. We examine technical issues related to specification, interpretation, estimation, and policy use. We also discuss identification strategies for estimating the role of price and non-price attributes in preferences when product attributes are incompletely observed. We illustrate these concepts via a stylized application to new car purchases, in which our objective is to measure preferences for fuel economy.
Phaneuf, D.J. and von Haefen, R.H. (2009), "Chapter 12 Estimating the Demand for Quality with Discrete Choice Models", Slottje, D.J. (Ed.) Quantifying Consumer Preferences (Contributions to Economic Analysis, Vol. 288), Emerald Group Publishing Limited, Bingley, pp. 317-347. https://doi.org/10.1108/S0573-8555(2009)0000288015Download as .RIS
Emerald Group Publishing Limited
Copyright © 2009, Emerald Group Publishing Limited