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Estimating consumer preferences using market data—an application to us automobile demand
Author(s) -
Arguea N. M.,
Hsiao C.,
Taylor G. A.
Publication year - 1994
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.3950090102
Subject(s) - homogeneous , automotive industry , econometrics , space (punctuation) , function (biology) , yearbook , economics , supply and demand , consumer demand , computer science , demand curve , microeconomics , industrial organization , mathematics , engineering , combinatorics , evolutionary biology , library science , biology , aerospace engineering , operating system
This paper explores the possibility of using market data to identify consumer preferences. A utility function composed of ‘homogeneous’ characteristics and goods‐specific effects is used as a basic link between the goods space and the characteristics space. The functional form for the hedonic price equation, the data requirements and issues of measurement errors for estimating demand and supply of characteristics are discussed. We illustrate the methodology by considering the US automobile demand using 1969–86 data compiled from Consumer Reports and Ward's Automotive Yearbook .