Mariuzzo, Franco Walsh, Patrick Paul Whelan, Ciara
Year of Publication:
Working Paper Series, UCD Centre for Economic Research 05/03
Given that brands (products) are location specific in terms of coverage of retail stores, we allow consumers to have preferences over location and products to carry distribution costs, alongside preferences and costs over other observable and unobservable product characteristics. We embed these considerations into Berry, Levinsohn and Pakes (1995) to jointly estimate demand and cost parameters for brands (products) in Retail Carbonated Soft Drinks. Allowing for location has a very significant impact on estimated primitives and the predictive power of the structural model. As a counterfactual exercise we show the effects on welfare of an equilibrium that results from a change in the distribution of consumer taste for location.
Consumer taste for location distributions differentiated products discrete choice aggregation structural model and retail carbonated soft drinks.