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Estimating a Differentiated Products Model with a Discrete/Continuous Choice and Limited Data

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  • Prentice, David

Abstract

This paper specifies a vertically differentiated products model for a product with a discrete/continuous choice. The model is easily estimated with the relatively limited data used in classical demand equation estimation, supplemented by readily available market characteristics data. The model, with some modifications, is estimated with a new dataset (by state and region) for the U.S. Portland cement industry. Plausible patterns of own and cross price elasticities are obtained. The role of market characteristics is estimated generalizing the applicability of the results to other markets and periods.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 28681.

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Date of creation: Dec 2000
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Handle: RePEc:pra:mprapa:28681

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Keywords: Vertical Differentiation; Demand; Portland Cement; United States;

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  1. Bresnahan, Timothy F, 1987. "Competition and Collusion in the American Automobile Industry: The 1955 Price War," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 457-82, June.
  2. Montgomery, Michael R., 1995. "'Time-to-build' completion patterns for nonresidential structures, 1961-1991," Economics Letters, Elsevier, vol. 48(2), pages 155-163, May.
  3. Bresnahan, Timothy F., 1981. "Departures from marginal-cost pricing in the American automobile industry : Estimates for 1977-1978," Journal of Econometrics, Elsevier, vol. 17(2), pages 201-227, November.
  4. Robert E. Lipsey & Doris Preston, 1966. "Source Book of Statistics Relating to Construction," NBER Books, National Bureau of Economic Research, Inc, number lips66-1.
  5. Davis, Peter, 2000. "Empirical models of demand for differentiated products," European Economic Review, Elsevier, vol. 44(4-6), pages 993-1005, May.
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Cited by:
  1. Melitón Ramirez Mattos, 2005. "Econometric Model for Cement demand and supply in Bolivia," Econometrics 0508019, EconWPA.

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