eprintid: 10092128 rev_number: 18 eprint_status: archive userid: 608 dir: disk0/10/09/21/28 datestamp: 2021-08-23 17:01:47 lastmod: 2021-11-01 01:51:10 status_changed: 2021-08-23 17:01:47 type: working_paper metadata_visibility: show creators_name: Lewbel, A creators_name: Nesheim, L title: Sparse demand systems: corners and complements ispublished: pub divisions: UCL divisions: B03 divisions: C03 divisions: F24 keywords: sparse demand, discrete choice, continuous choice, fruit, Tobit model, scanner data, complements note: This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions. abstract: We propose a demand model where consumers simultaneously choose a few different goods from a large menu of available goods, and choose how much to consume of each good. The model nests multinomial discrete choice and continuous demand systems as special cases. Goods can be substitutes or complements. Random coefficients are employed to capture the wide variation in the composition of consumption baskets. Non-negativity constraints produce corners that account for different consumers purchasing different numbers of types of goods. We show semiparametric identification of the model. We apply the model to the demand for fruit in the United Kingdom. We estimate the model’s parameters using UK scanner data for 2008 from the Kantar World Panel. Using our parameter estimates, we estimate a matrix of demand elasticities for 27 categories of fruit and analyze a range of tax and policy change scenarios. date: 2019-09-23 date_type: published publisher: Institute for Fiscal Studies official_url: https://doi.org/10.1920/wp.cem.2019.4519 oa_status: green full_text_type: pub language: eng primo: open primo_central: open_green verified: verified_manual elements_id: 1766777 doi: 10.1920/wp.cem.2019.4519 lyricists_name: Nesheim, Lars lyricists_id: LNESH46 actors_name: Nesheim, Lars actors_id: LNESH46 actors_role: owner full_text_status: public series: Cemmap Working Paper number: 45/19 place_of_pub: London, UK citation: Lewbel, A; Nesheim, L; (2019) Sparse demand systems: corners and complements. (Cemmap Working Paper 45/19). Institute for Fiscal Studies: London, UK. Green open access document_url: https://discovery.ucl.ac.uk/id/eprint/10092128/1/CW4519-Sparse-demand-systems-corners-and-complements.pdf