Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/296353 
Year of Publication: 
2023
Citation: 
[Journal:] Quantitative Economics [ISSN:] 1759-7331 [Volume:] 14 [Issue:] 4 [Year:] 2023 [Pages:] 1251-1294
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We propose a demand estimation method that allows for a large number of zerosale observations, rich unobserved heterogeneity, and endogenous prices. We do so by modeling small market sizes through Poisson arrivals. Each of these arriving consumers solves a standard discrete choice problem. We present a Bayesian IV estimation approach that addresses sampling error in product shares and scales well to rich data environments. The data requirements are traditional market-level data as well as a measure of market sizes or consumer arrivals. After presenting simulation studies, we demonstrate the method in an empirical application of air travel demand.
Subjects: 
Discrete choice modeling
demand estimation
zero-sale observations
Bayesian methods
airline markets
JEL: 
C11
C18
L93
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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