Estimating consumer preferences using market data—an application to us automobile demand

Abstract

This paper explores the possibility of using market data to identify consumer preferences. A utility function composed of ‘homogeneous’ characteristics and goods‐specific effects is used as a basic link between the goods space and the characteristics space. The functional form for the hedonic price equation, the data requirements and issues of measurement errors for estimating demand and supply of characteristics are discussed. We illustrate the methodology by considering the US automobile demand using 1969–86 data compiled from Consumer Reports and Ward's Automotive Yearbook.

The Effects of the Global Financial Crisis on Automobile Demand in China

“…Disposable income was given the greatest weight among all the factors used in their model to predict demand, and the results showed that price was a significant factor when automobile sales were depressed. Arguea, Hsiao, and Taylor (1994) developed a demand function using the data of automobile characteristics to estimate US automobile demand from 1969 to 1986. They used leastsquares estimates to calculate price elasticity and income elasticity, and found that income has a significant influence on the car demand.…”

“…Following Carlson and Umble (1980) and Arguea, Hsiao, and Taylor (1994), personal disposable income is thus included in this study's model. Assuming that all other factors influencing demand remain unchanged, there is a positive correlation between the demand for a product and personal disposable income.…”

“…Although there are many papers that have examined automobile demand, such as Carlson (1978), Carlson and Umble (1980), Arguea, Hsiao, and Taylor (1994), Wojcik (2000), Kobos, Erickson, and Drennen (2003), and Shepherd, Bonsall, and Harrison (2012), these have concentrated mainly on American and European markets. Moreover, as yet there are no papers which analyze the demand for automobiles in China for the years 2001 to 2013.…”

Consumer valuation of energy-saving features of residential air conditioners with hedonic and choice models

“…This may be because low-income households cannot afford energy-efficient appliances owing to the Choice models are used frequently for appliance analyses while hedonic models are used less frequently. On the other hand, hedonic models have been used for the analysis of consumer valuations of the fuel economy (Arguea, Hsiao, and Taylor, 1994;Espey and Nair, 2005;Fan and Rubin, 2009;Fifer and Bunn, 2009;McManus, 2007). Greene (2010) conducts a literature survey of consumer valuation of the fuel economy and reports that the implicit discount rates are estimated to be higher when hedonic models are applied.…”

Relative performance of the statistical learning network: An application of the price-quality relationship in the automobile

“…Several applications have already been carried out for various complex products such as housing or microcomputers, and especially the automobile (Cowling and Cubbin, 1972;Agarwal and Ratchford, 1980;Cubbin and Murfin, 1987;Goodman, 1989;Argea et al, 1994). However, this method has important limitations which renders its usage somewhat delicate on the empirical level.…”