Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192212 
Year of Publication: 
1998
Series/Report no.: 
Discussion Papers No. 229
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
This paper discusses a particular approach to empirical consumer demand modelling when products are differentiated and the product attributes are unobservable. In contrast to the traditional approach to this problem, see e.g. Epple (1987) and Deaton (1987, 1988), where the product variants are treated as infinitely divisible goods, the present approach assumes that the consumer is making his choice of variant from a set of discrete "packages" of attribute combinations. Subsequently, given the (discrete) choice of variants the corresponding quantities are treated as continuous choices. Thus in this approach the consumer's decision process is formulated as a discrete/continuous choice problem. The empirical analysis is based on microdata from the Sichuan province in China. We show that in this case the estimation methods work well and yield reasonable results.
Subjects: 
Consumer demand
Differentiated products
Latent product attributes
JEL: 
C31
C43
D12
Document Type: 
Working Paper

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