Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/253598 
Authors: 
Year of Publication: 
2021
Citation: 
[Journal:] Quantitative Economics [ISSN:] 1759-7331 [Volume:] 12 [Issue:] 4 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2021 [Pages:] 1273-1305
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
Prominent features of differentiated product markets are segmentation and product proliferation blurring the boundaries between segments. I develop a tractable demand model, the Ordered Nested Logit, which allows for asymmetric substitution between segments. I apply the model to the automobile market where segments are ordered from small to luxury. I find that consumers, when substituting outside their vehicle segment, are more likely to switch to a neighboring segment. Accounting for such asymmetric substitution matters when evaluating the impact of new product introduction or the effect of subsidies on fuel-efficient cars.
Subjects: 
Discrete choice model
Generalized Extreme Value
Ordered Nested Logit
JEL: 
D11
D12
L62
M3
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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