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When Can A Demand System Be Described By A Multinomial Logit With Income Effect?

Listed author(s):
  • Jacques-Francois Thisse

    ()

  • Philip Ushchev

    ()

    (National Research University Higher School of Economics)

We show that a wide class of demand systems for dierentiated products, such as those generated by additive preferences, indirectly additive preferences, and Kimball-like homothetic preferences, can be given a multinomial logit foundation provided that the conditional indirect utility is nonlinear and varies with the whole price array.

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File URL: https://www.hse.ru/data/2016/06/01/1130394265/139EC2016.pdf
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Paper provided by National Research University Higher School of Economics in its series HSE Working papers with number WP BRP 139/EC/2016.

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Length: 20 pages
Date of creation: 2016
Publication status: Published in WP BRP Series: Economics / EC, June 2016, pages 1-20
Handle: RePEc:hig:wpaper:139/ec/2016
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  1. Amartya Sen, 1997. "Maximization and the Act of Choice," Econometrica, Econometric Society, vol. 65(4), pages 745-780, July.
  2. Kimball, Miles S, 1995. "The Quantitative Analytics of the Basic Neomonetarist Model," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(4), pages 1241-1277, November.
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  4. Evgeny Zhelobodko & Sergey Kokovin & Mathieu Parenti & Jacques‐François Thisse, 2012. "Monopolistic Competition: Beyond the Constant Elasticity of Substitution," Econometrica, Econometric Society, vol. 80(6), pages 2765-2784, November.
  5. Gianmarco Ottaviano & Takatoshi Tabuchi & Jacques-FranÁois Thisse, 2002. "Agglomeration and Trade Revisited," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(2), pages 409-436, May.
  6. Pablo Fajgelbaum & Gene M. Grossman & Elhanan Helpman, 2011. "Income Distribution, Product Quality, and International Trade," Journal of Political Economy, University of Chicago Press, vol. 119(4), pages 721-765.
  7. Osharin, Alexander & Thisse, Jacques-François & Ushchev, Philip & Verbus, Valery, 2014. "Monopolistic competition and income dispersion," Economics Letters, Elsevier, vol. 122(2), pages 348-352.
  8. Behrens, Kristian & Murata, Yasusada, 2007. "General equilibrium models of monopolistic competition: A new approach," Journal of Economic Theory, Elsevier, vol. 136(1), pages 776-787, September.
  9. Gita Gopinath & Oleg Itskhoki, 2010. "Frequency of Price Adjustment and Pass-Through," The Quarterly Journal of Economics, Oxford University Press, vol. 125(2), pages 675-727.
  10. Armstrong, Mark & Vickers, John, 2015. "Which demand systems can be generated by discrete choice?," Journal of Economic Theory, Elsevier, vol. 158(PA), pages 293-307.
  11. Jia, Hao & Skaperdas, Stergios & Vaidya, Samarth, 2013. "Contest functions: Theoretical foundations and issues in estimation," International Journal of Industrial Organization, Elsevier, vol. 31(3), pages 211-222.
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  16. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
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  20. repec:hrv:faseco:30703806 is not listed on IDEAS
  21. Jessie Handbury & David E. Weinstein, 2015. "Goods Prices and Availability in Cities," Review of Economic Studies, Oxford University Press, vol. 82(1), pages 258-296.
  22. Acemoglu, Daron & Jensen, Martin Kaae, 2013. "Aggregate comparative statics," Games and Economic Behavior, Elsevier, vol. 81(C), pages 27-49.
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