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dc.contributor.authorWakamori, Naokien_US
dc.description.abstractConsumers often purchase more than one differentiated product, assembling a portfolio, which might potentially affect substitution patterns of demand and, as a consequence, oligopolistic firms' pricing strategies. This paper studies such consumers' portfolio considerations by developing a structural model that allows for flexible complementarities/substitutabilities depending on consumer attributes and product characteristics. I estimate the model using Japanese household-level data on automobile purchasing decisions. My estimates suggest that complementarities arise when households purchase a combination of one small automobile and one minivan as their portfolio. Ignoring such effects leads to a overstated counterfactual analysis. Simulation results suggest that a policy proposal of repealing the current tax subsidies for small ecofriendly automobiles would decrease the demand for those automobiles by 9%; less than the 14% drop predicted by a standard single discrete choice model.en_US
dc.publisher|aBank of Canada |cOttawaen_US
dc.relation.ispartofseries|aBank of Canada Working Paper |x2011,27en_US
dc.subject.keywordEconomic modelsen_US
dc.subject.keywordMarket structure and pricingen_US
dc.titlePortfolio considerations in differentiated product purchases: An application to the Japanese automobile marketen_US
dc.typeWorking Paperen_US

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