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Differentiated Products Demand Systems from a Combination of Micro and Macro Data: The New Car Market

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  • Levinsohn, James
  • Berry, Steven
  • Pakes, Ariel

Abstract

In this paper, we consider how rich sources of information on consumer choice can help to identify demand parameters in a widely used class of differentiated products demand models. Most important, we show how to use “second†choice†data on automotive purchases to obtain good estimates of substitution patterns in the automobile industry. We use our estimates to make out†of†sample predictions about important recent changes in industry structure.

Suggested Citation

  • Levinsohn, James & Berry, Steven & Pakes, Ariel, 2004. "Differentiated Products Demand Systems from a Combination of Micro and Macro Data: The New Car Market," Scholarly Articles 3436404, Harvard University Department of Economics.
    • Handle: RePEc:hrv:faseco:3436404
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities

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