Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192207 
Year of Publication: 
1998
Series/Report no.: 
Discussion Papers No. 223
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
Traditional approaches to consumer demand modelling ignores the problem associated with product heterogeneity where important product characteristics are latent. The point of departure in the present study is a particular framework developed in Dagsvik (1996a,b) and Dagsvik et al. (1998). In this approach the consumer is assumed to make his choice from a discrete set of product variants. The resulting model has the form of a modified conventional demand system, where the modification consists in replacing the standard price indexes by a indexes which are derived from underlying behavioral assumptions. The empirical application is based on a sample of Norwegian micro data market prices and household consumption.
Subjects: 
Consumer demand
Differentiated products
Unobserved product heterogeneity
JEL: 
C31
C43
D12
Document Type: 
Working Paper

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