Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282383 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10695
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We propose a demand estimation method that allows researchers to estimate substitution patterns from unstructured image and text data. We first employ a series of machine learning models to measure product similarity from products' images and textual descriptions. We then estimate a nested logit model with product-pair specific nesting parameters that depend on the image and text similarities between products. Our framework does not require collecting product attributes for each category and can capture product similarity along dimensions that are hard to account for with observed attributes. We apply our method to a dataset describing the behavior of Amazon shoppers across several categories and show that incorporating texts and images in demand estimation helps us recover a flexible cross-price elasticity matrix.
Subjects: 
demand estimation
unstructured data
computer vision
text models
JEL: 
C10
C50
C81
Document Type: 
Working Paper
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