IDEAS home Printed from https://ideas.repec.org/p/ngi/dpaper/07-07.html
   My bibliography  Save this paper

A Representative Consumer Framework for Discrete Choice Models with Endogenous Total Demand

Author

Listed:
  • Yukihiro Kidokoro

    (National Graduate Institute for Policy Studies)

Abstract

Standard discrete choice models correspond to 'partial' utility maximization in which the controlled total is determined exogenously; typically, consumers are assumed to demand at most one unit. The purpose of this paper is to formulate a model in which discrete choice models are incorporated consistently into the full utility maximization framework and to establish a theoretical foundation for discrete choice models that assume no a priori controlled total. We derive the form of the corresponding indirect utility function of a representative consumer and the own-price and cross-price elasticities, and develop a method for measuring welfare, clarifying their implications.

Suggested Citation

  • Yukihiro Kidokoro, 2007. "A Representative Consumer Framework for Discrete Choice Models with Endogenous Total Demand," GRIPS Discussion Papers 07-07, National Graduate Institute for Policy Studies, revised Nov 2008.
    • Handle: RePEc:ngi:dpaper:07-07
    as

    Download full text from publisher

    File URL: https://grips.repo.nii.ac.jp/?action=repository_action_common_download&item_id=977&item_no=1&attribute_id=20&file_no=1
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. DE PALMA, André & KILANI, Karim, 2003. "(Un)conditional distribution of compensating variation in discrete choice models," LIDAM Discussion Papers CORE 2003100, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    2. A. de Palma & K. Kilani, 2003. "Compensating Variation for Discrete Choice Models," THEMA Working Papers 2003-02, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mulalic, Ismir & Rouwendal, Jan, 2020. "Does improving public transport decrease car ownership? Evidence from a residential sorting model for the Copenhagen metropolitan area," Regional Science and Urban Economics, Elsevier, vol. 83(C).
    2. De Borger, Bruno & Mayeres, Inge, 2007. "Optimal taxation of car ownership, car use and public transport: Insights derived from a discrete choice numerical optimization model," European Economic Review, Elsevier, vol. 51(5), pages 1177-1204, July.
    3. Min Qiang Zhao & Ju-Chin Huang, 2018. "The Representative Consumer Approximation Bias in Discrete Choice Welfare Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(4), pages 969-984, December.
    4. van Duijn, Mark & Rouwendal, Jan, 2021. "Sorting based on urban heritage and income: Evidence from the Amsterdam metropolitan area," Regional Science and Urban Economics, Elsevier, vol. 90(C).
    5. Pudney, Stephen & Hancock, Ruth & Henandez, Monica, 2004. "Participation in multiple welfare programmes: discrete choice with heterogeneous awareness," ISER Working Paper Series 2004-15, Institute for Social and Economic Research.
    6. J.M.C. Santos Silva, 2004. "Deriving welfare measures in discrete choice experiments: a comment to Lancsar and Savage (2)," Health Economics, John Wiley & Sons, Ltd., vol. 13(9), pages 913-918, September.

    More about this item

    Keywords

    Discrete choice; representative consumer; endogenous demand; logit model; generalized extreme value model;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ngi:dpaper:07-07. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/gripsjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.