Blundell, R;
(2020)
Estimation of a Heterogeneous Demand Function with Berkson Errors.
Review of Economics and Statistics
10.1162/rest_a_01018.
(In press).
Preview |
Text
berkson_paper_2020_07_12.pdf - Accepted Version Download (2MB) | Preview |
Abstract
Berkson errors are commonplace in empirical microeconomics. In consumer demand this form of measurement error occurs when the price an individual pays is measured by the (weighted) average price paid by individuals in a group (e.g., a county), rather than the true transaction price. We show the importance of Berkson errors for demand estimation with nonseparable unobserved heterogeneity. We develop a consistent estimator using external information on the true price distribution. Examining gasoline demand in the U.S., we document substantial within-market price variability. Accounting for Berkson errors is quantitatively important. Imposing the Slutsky shape constraint reduces sensitivity to Berkson errors.
| Type: | Article |
|---|---|
| Title: | Estimation of a Heterogeneous Demand Function with Berkson Errors |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1162/rest_a_01018 |
| Publisher version: | https://doi.org/10.1162/rest_a_01018 |
| Language: | English |
| Additional information: | This version is the author accepted manuscript. For information on re-use, please refer to the publisher’s terms and conditions. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10113004 |
Archive Staff Only
 |
View Item |
