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Forecasting new product penetration with flexible substitution patterns

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  • Brownstone, David
  • Train, Kenneth

Abstract

We describe and apply choice models, including generalizations of logit called 'mixed logits,' that do not exhibit the restrictive 'independence from irrelevant alternatives' property and can approximate any substitution pattern. The models are estimated on data from a stated-preference survey that elicited customers' preferences among gas, electric, methanol, and CNG vehicles with various attributes.

Suggested Citation

  • Brownstone, David & Train, Kenneth, 1999. "Forecasting new product penetration with flexible substitution patterns," University of California Transportation Center, Working Papers qt1j6814b3, University of California Transportation Center.
  • Handle: RePEc:cdl:uctcwp:qt1j6814b3
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    References listed on IDEAS

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    1. Kenneth Train, "undated". "Simulation Methods for Probit and Related Models Based on Convenient Error Partitioning," Working Papers _009, University of California at Berkeley, Econometrics Laboratory Software Archive.
    2. Lee, Lung-Fei, 1992. "On Efficiency of Methods of Simulated Moments and Maximum Simulated Likelihood Estimation of Discrete Response Models," Econometric Theory, Cambridge University Press, vol. 8(4), pages 518-552, December.
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    4. McFadden, Daniel, 1989. "A Method of Simulated Moments for Estimation of Discrete Response Models without Numerical Integration," Econometrica, Econometric Society, vol. 57(5), pages 995-1026, September.
    5. David Revelt & Kenneth Train, 1998. "Mixed Logit With Repeated Choices: Households' Choices Of Appliance Efficiency Level," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 647-657, November.
    6. Tülin Erdem, 1996. "A Dynamic Analysis of Market Structure Based on Panel Data," Marketing Science, INFORMS, vol. 15(4), pages 359-378.
    7. Stern, Steven, 1992. "A Method for Smoothing Simulated Moments of Discrete Probabilities in Multinomial Probit Models," Econometrica, Econometric Society, vol. 60(4), pages 943-952, July.
    8. Brownstone, David & Bunch, David S & Golob, Thomas F & Ren, Weiping, 1996. "A Transactions Choice Model for Forecasting Demand for Alternative-Fuel Vehicles," University of California Transportation Center, Working Papers qt3sm7w9zk, University of California Transportation Center.
    9. Kenneth E. Train, 1998. "Recreation Demand Models with Taste Differences over People," Land Economics, University of Wisconsin Press, vol. 74(2), pages 230-239.
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