Embedding consumer taste for location into a structural model of equilibrium

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Centre for Economic Research Working Paper Series ; No. WP05/03

Classification and Topics

• Classification: Wirtschaft ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Automobiles; Other Transportation Equipment; Related Parts and Equipment
• Subject: Consumer taste for location distributions ; differentiated products ; discrete choice ; aggregation ; structural model and retail carbonated soft drinks.

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mariuzzo, Franco ; Walsh, Patrick Paul ; Whelan, Ciara
• Event: Veröffentlichung
• (who): University College Dublin, Department of Economics
• (where): Dublin
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/72362
• Last update: 10.03.2025, 11:45 AM CET