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Omitted Product Attributes in Discrete Choice Models Author info | Abstract | Publisher info | Download info | Related research | Statistics Amil Petrin
Kenneth Train
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We describe two methods for correcting an omitted variables problem in discrete choice models: a fixed effects approach and a control function approach. The control function approach is easier to implement and applicable in situations for which the fixed effects approach is not. We apply both methods to a cross-section of disaggregate data on customer's choice among television options including cable, satellite, and antenna. As theory predicts, the estimated price response rises substantially when either correction is applied. All of the estimated parameters and the implied price elasticities are very similar for both methods.
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Date of creation: Jan 2003Date of revision:
Handle: RePEc:nbr:nberwo:9452Note: IOContact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Email: Web page: http://www.nber.org More information through EDIRC
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Find related papers by JEL classification: D0 - Microeconomics - - General L0 - Industrial Organization - - General
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