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MODELING CONSUMER DEMAND FOR A LARGE SET OF QUALITY DIFFERENTIATED GOODS: ESTIMATION AND WELFARE RESULTS FROM A SYSTEMS APPROACH
Category: Econometrics
HEDONIC PRICING Wednesday 28th August 2002, 09:30 - 11:00, Room: 1.13
Session Chair(s):
Roger von Haefen, Bureau of Labor Statistics, UNITED STATES
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Abstract:
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We develop an approach for estimating individual level preferences for a large set of quality differentiated goods and for constructing Hicksian welfare measures for price and quality changes within a demand system framework. Our approach uses a simulated maximum likelihood estimation procedure for recovering estimates of the structural parameters and an adaptive Metropolis-Hastings algorithm for constructing Hicksian consumer surplus estimates. We illustrate our approach with a recreation data set consisting of day trips to 62 Mid-Atlantic beaches.
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