Dynamics of Consumer Demand for New Durable Goods
Most new consumer durable goods experience rapid declines in prices and improvements in qual- ity, suggesting the importance of modeling dynamics. This paper estimates a dynamic model of consumer preferences for new durable goods with persistent heterogeneous consumer tastes, rational expectations and repeat purchases over time. We estimate the model on the digital camcorder in- dustry using panel data on prices, sales and characteristics. We nd that standard COLIs overstate welfare gain in later periods due to a changing composition of buyers. The one-year industry elas- ticity in response to a transitory industry-wide price shock is about 25% less than the one-month elasticity.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||Jan 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.bu.edu/econ/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bajari, Patrick & Benkard, C. Lanier & Krainer, John, 2004.
"House Prices and Consumer Welfare,"
1840, Stanford University, Graduate School of Business.
- Brett Gordon & Ronald Goettler, 2010.
"Does AMD spur Intel to innovate more?,"
2010 Meeting Papers
151, Society for Economic Dynamics.
- Pasquale Schiraldi, 2010.
"Automobile Replacement: A DynamicStructural Approach,"
STICERD - Economics of Industry Papers
49, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Pasquale Schiraldi, 2011. "Automobile replacement: a dynamic structural approach," RAND Journal of Economics, RAND Corporation, vol. 42(2), pages 266-291, 06.
- Pasquale Schiraldi, 2008. "Automobile replacement: a dynamic structural approach," LSE Research Online Documents on Economics 21780, London School of Economics and Political Science, LSE Library.
- Jeffrey T. Prince, 2008. "Repeat Purchase amid Rapid Quality Improvement: Structural Estimation of Demand for Personal Computers," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 17(1), pages 1-33, 03.
- Marc Rysman & Gautam Gowrisankaran & Minsoo Park, 2011. "Measuring Network Effects in a Dynamic Environment," Boston University - Department of Economics - Working Papers Series WP2011-061, Boston University - Department of Economics.
- Nair, Harikesh, S., 2006.
"Intertemporal Price Discrimination with Forward-Looking Consumers: Application to the US Market for Console Video-Games,"
1947, Stanford University, Graduate School of Business.
- Harikesh Nair, 2007. "Intertemporal price discrimination with forward-looking consumers: Application to the US market for console video-games," Quantitative Marketing and Economics, Springer, vol. 5(3), pages 239-292, September.
- Ana Aizcorbe, 2005. "Price Deflators for High Technology Goods and the New Buyer Problem," Industrial Organization 0502009, EconWPA.
- Tülin Erdem & Michael Keane & T. Öncü & Judi Strebel, 2005. "Learning About Computers: An Analysis of Information Search and Technology Choice," Quantitative Marketing and Economics, Springer, vol. 3(3), pages 207-247, September.
- Susanna Esteban & Matthew Shum, 2007. "Durable-goods oligopoly with secondary markets: the case of automobiles," RAND Journal of Economics, RAND Corporation, vol. 38(2), pages 332-354, 06.
- Per Krusell & Anthony A. Smith, Jr., .
"Income and Wealth Heterogeneity in the Macroeconomy,"
GSIA Working Papers
1997-37, Carnegie Mellon University, Tepper School of Business.
- Per Krusell & Anthony A. Smith & Jr., 1998. "Income and Wealth Heterogeneity in the Macroeconomy," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 867-896, October.
- Krusell, P & Smith Jr, A-A, 1995. "Income and Wealth Heterogeneity in the Macroeconomic," RCER Working Papers 399, University of Rochester - Center for Economic Research (RCER).
- Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-90, July.
- Tülin Erdem & Michael P. Keane, 1996. "Decision-Making Under Uncertainty: Capturing Dynamic Brand Choice Processes in Turbulent Consumer Goods Markets," Marketing Science, INFORMS, vol. 15(1), pages 1-20.
- Patrick Bajari & C. Lanier Benkard, 2005. "Demand Estimation with Heterogeneous Consumers and Unobserved Product Characteristics: A Hedonic Approach," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1239-1276, December.
- Keane, Michael P & Wolpin, Kenneth I, 1997.
"The Career Decisions of Young Men,"
Journal of Political Economy,
University of Chicago Press, vol. 105(3), pages 473-522, June.
- Thierry Magnac & David Thesmar, 2002. "Identifying Dynamic Discrete Decision Processes," Econometrica, Econometric Society, vol. 70(2), pages 801-816, March.
- Daniel A. Ackerberg & Marc Rysman, 2000. "Unobservable Product Differentiation in Discrete Choice Models: Estimating Price Elasticities and Welfare Effects," Econometric Society World Congress 2000 Contributed Papers 1675, Econometric Society.
- Douglas Rivers & Quang Vuong, 2002. "Model selection tests for nonlinear dynamic models," Econometrics Journal, Royal Economic Society, vol. 5(1), pages 1-39, June.
- Rust, John, 1987. "Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher," Econometrica, Econometric Society, vol. 55(5), pages 999-1033, September.
When requesting a correction, please mention this item's handle: RePEc:bos:wpaper:wp2011-062. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gillian Gurish)
If references are entirely missing, you can add them using this form.