Improving the performance of random coefficients demand models: The role of optimal instruments

Reynaert, Mathias; Verboven, Frank

doi:10.1016/j.jeconom.2013.12.001

Cited by 118 publications

(88 citation statements)

References 31 publications

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“…For example, Berry et al (1995) utilized both the "BLP instruments" and proxies for marginal cost, and Berry et al (1999) added further cost instruments. The importance of having both types of instruments, even in a parametric setting, is supported by recent simulations in Reynaert & Verboven (2014). The results of may explain why: both types of instruments appear to be essential, at least without additional data or structure.…”

Section: Instrumental Variablesmentioning

confidence: 64%

Identification in differentiated product markets

Berry¹,

Haile²

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract Empirical models of demand for-and, often, supply of-differentiated products are widely used in practice, typically employing parametric functional forms and distributions of consumer heterogeneity. We review some recent work studying identification in a broad class of such models. This work shows that parametric functional forms and distributional assumptions are not essential for identification. Rather, identification relies primarily on the standard requirement that instruments be available for the endogenous variables-here, typically, prices and quantities. We discuss the kinds of instruments needed for identification and how the reliance on instruments can be reduced by nonparametric functional form restrictions or better data. We also discuss results on discrimination between alternative models of oligopoly competition. Terms of use: Documents in EconStor may

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Section: Instrumental Variablesmentioning

confidence: 64%

Identification in differentiated product markets

Berry¹,

Haile²

2015

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“…It may therefore be useful to look for other ways to compute an instrument for the price. Reynaert and Verboven (2014) have recently emphasized the importance of using approximations to the optimal instruments. Their methodology appears to be flexible enough to avoid the use of characteristics of neighbouring areas in the construction of the instrument.…”

Section: Discussionmentioning

confidence: 99%

Does Improving Public Transport Decrease Car Ownership? Evidence from the Copenhagen Metropolitan Area

Mulalic¹,

Pilegaard²,

Rouwendal

2016

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractCar ownership is lower in urban areas, which is probably related to the availability of better public transport. Better public transport thus may offer the possibility to relieve the many problems (congestion, health, and parking) associated with the presence of cars in urban areas. To investigate this issue, we develop and estimate a model for the simultaneous choice of a residential area and car ownership. The model is estimated on Danish register data for single-earner and dual-earners households in the greater Copenhagen metropolitan area. We pay special attention to accessibility of the metro network which offers particularly high quality public transport. Simulations based on the estimated model show that for the greater Copenhagen area a planned extension of the metro network decreases car ownership by 2-3%. Our results suggest also a substantial increase in the interest for living in areas close to the metro network, that affects the demographic composition of neighbourhoods.

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“…The estimation strategy for the demand model in 3.2 follows the algorithm of Berry et al (1995) and extends it in several dimensions (Reynaert and Verboven, 2014;Hess et al, 2006). Product xed eects account for the simultaneity problem of the mean utility δ (Nevo, 2001).…”

Section: Identication and Estimationmentioning

confidence: 99%

Umbrella Branding in Pharmaceutical Markets

Suppliet

2017

SSRN Journal

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Umbrella branding is a marketing practice whereby multi-product rms leverage their reputation across dierent product categories. This paper investigates how advertising in the market of over-the-counter (OTC) drugs aects the decision to buy prescription drugs from a promoted brand name. I exploit specic characteristics of market regulation in Germany to identify the eect of advertising and nd positive eects of umbrella branding on sales of prescription drugs. Umbrella branding results in market expansion, particularly for generic rms which invest in OTC drug advertising. If the eect leads to more consumers of generic substitutes or to more patients in undertreated therapeutic areas, market expansion can have a positive eect on welfare.

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Improving the performance of random coefficients demand models: The role of optimal instruments

Cited by 118 publications

References 31 publications

Identification in differentiated product markets

Identification in differentiated product markets

Does Improving Public Transport Decrease Car Ownership? Evidence from the Copenhagen Metropolitan Area

Umbrella Branding in Pharmaceutical Markets

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