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Econometric Modeling of Differential Durable Goods Markets: an Application to Telephone

Author

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  • Foncel, J.
  • Ivaldi, M.

Abstract

As the structure of consumer preferences plays a crucial role in the analysis of differentiated product markets, estimation of demand systems is a sensitive task. This paper contributes to this project in two ways. First, we develop a method to deal with the simultaneous choice of an equipment and a level of usage. This question is crucial for durable goods. Second, our method is suited for households, i.e., micro data. The main feature of our method is to specify a direct utility function, which provides correct substitution patterns among products at the aggregate level, i.e., compatible with the intuition.

Suggested Citation

  • Foncel, J. & Ivaldi, M., 1999. "Econometric Modeling of Differential Durable Goods Markets: an Application to Telephone," Papers 99.527, Toulouse - GREMAQ.
    • Handle: RePEc:fth:gremaq:99.527
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    More about this item

    Keywords

    ECONOMETRICS ; ECONOMIC MODELS ; DEMAND ; CONSUMPTION;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • C00 - Mathematical and Quantitative Methods - - General - - - General

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