Functional Forms in Discrete/Continuous Choice Models With General Corner Solution
In this paper we present a new utility model that serves as the basis for modeling discrete/continuous consumer choices with a general corner solution. The new model involves a more flexible representation of preferences than what has been used in the previous literature and, unlike most of this literature, it is not additively separable. This functional form can handle richer substitution patterns such as complementarity as well as substitution among goods. We focus in part on the Quadratic Box-Cox utility function and examine its properties from both theoretical and empirical perspectives. We identify the significance of the various parameters of the utility function, and demonstrate an estimation strategy that can be applied to demand systems involving both a small and large number of commodities.
|Date of creation:||30 Dec 2008|
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- Phaneuf, Daniel J. & Kling, Catherine L. & Herriges, Joseph A., 2000.
"Estimation and Welfare Calculations in a Generalized Corner Solution Model with an Application to Recreation Demand,"
Staff General Research Papers
1355, Iowa State University, Department of Economics.
- Daniel J. Phaneuf & Catherine L. Kling & Joseph A. Herriges, 2000. "Estimation and Welfare Calculations in a Generalized Corner Solution Model with an Application to Recreation Demand," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 83-92, February.
- Daniel J. Phaneuf & Catherine L. Kling & Joseph A. Herriges, 1998. "Estimation and Welfare Calculations in a Generalized Corner Solution Model with an Application to Recreation Demand," Center for Agricultural and Rural Development (CARD) Publications 99-wp207, Center for Agricultural and Rural Development (CARD) at Iowa State University.
- Igal Hendel, 1999. "Estimating Multiple-Discrete Choice Models: An Application to Computerization Returns," Review of Economic Studies, Oxford University Press, vol. 66(2), pages 423-446.
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- Chiang, Jeongwen & Lee, Lung-Fei, 1992.
"Discrete/continuous models of consumer demand with binding nonnegativity constraints,"
Journal of Econometrics,
Elsevier, vol. 54(1-3), pages 79-93.
- Chiang, J. & Lee, L-F., 1990. "Discrete/Continuous Models of Consumer Demand with Binding Non-Negativity Constraints," Papers 261, Minnesota - Center for Economic Research.
- Phaneuf, Daniel J. & Smith, V. Kerry, 2006. "Recreation Demand Models," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 15, pages 671-761 Elsevier.
- Parsons George R. & Kealy Mary Jo, 1995. "A Demand Theory for Number of Trips in a Random Utility Model of Recreation," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 357-367, November.
- von Haefen R.H. & Phaneuf D.J. & Parsons G.R., 2004. "Estimation and Welfare Analysis With Large Demand Systems," Journal of Business & Economic Statistics, American Statistical Association, vol. 22, pages 194-205, April.
- Hausman, Jerry A. & Leonard, Gregory K. & McFadden, Daniel, 1995. "A utility-consistent, combined discrete choice and count data model Assessing recreational use losses due to natural resource damage," Journal of Public Economics, Elsevier, vol. 56(1), pages 1-30, January.
- Parsons, George R. & Jakus, Paul M. & Tomasi, Ted, 1999. "A Comparison of Welfare Estimates from Four Models for Linking Seasonal Recreational Trips to Multinomial Logit Models of Site Choice," Journal of Environmental Economics and Management, Elsevier, vol. 38(2), pages 143-157, September.
- Herriges, Joseph A. & Kling, Catherine L. & Phaneuf, Daniel J., 1999. "Corner Solution Models of Recreation Demand: A Comparison of Competing Frameworks," Staff General Research Papers 1513, Iowa State University, Department of Economics.
- Lee, Lung-Fei & Pitt, Mark M, 1986. "Microeconometric Demand Systems with Binding Nonnegativity Constraints: The Dual Approach," Econometrica, Econometric Society, vol. 54(5), pages 1237-42, September.
- von Haefen, Roger H., 2007. "Empirical strategies for incorporating weak complementarity into consumer demand models," Journal of Environmental Economics and Management, Elsevier, vol. 54(1), pages 15-31, July.
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