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Embedding consumer taste for location into a structural model of equilibrium
Date Issued
2005-01-20
Date Available
2008-05-19T14:23:28Z
Abstract
Given that brands (products) are location specific in terms of coverage of retail stores, we allow consumers to have preferences over location and products to carry distribution costs, alongside preferences and costs over other observable and unobservable product characteristics. We embed these considerations into Berry, Levinsohn and Pakes (1995) to jointly estimate demand and cost parameters for brands (products) in Retail Carbonated Soft Drinks. Allowing for location has a very significant impact on estimated primitives and the predictive power of the structural model. As a counterfactual exercise we show the effects on welfare of an equilibrium that results from a change in the distribution of consumer taste for location.
Type of Material
Working Paper
Publisher
University College Dublin; School of Economics
Series
UCD Centre for Economic Research working paper series
WP05/03
Copyright (Published Version)
2005, Authors
Classification
L11
L62
Subject – LCSH
Consumers' preferences
Product differentiation
Soft drinks
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
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