TY  - JOUR
AU  - Hendel,Igal
TI  - Estimating Multiple-Discrete Choice Models: An Application to Computeri-zzation Returns
JF  - National Bureau of Economic Research Technical Working Paper Series
VL  - No. 168
PY  - 1994
Y2  - October 1994
UR  - http://www.nber.org/papers/t0168
L1  - http://www.nber.org/papers/t0168.pdf
N1  - Author contact info:
Igal Hendel
Department of Economics
Northwestern University
2001 Sheridan Road
Evanston, IL 60208
Tel: 847/491-8226
Fax: 847/491-7001
E-Mail: igal@northwestern.edu
AB  - This paper develops a multiple-discrete choice model for the analysis of demand of differentiated products.  Users maximize profits by choosing the number of units of each brand they purchase. Multiple-unit as well as multiple-brand purchases are allowed.  These two features distinguish this model from classical discrete choice models which consider only a single choice among mutually exclusive alternatives.  Model parameters are estimated using the simulated method of moments technique. Both requirements - microfoundations and estimability -are imposed in order to exploit the available micro level data on personal computer purchases.  The estimated demand structure is used to assess welfare gains from computerization and technological innovation in peripherals industries.  The estimated return on investment in computers is 90%.  Moreover, a 10% increase in the performance to price ratio of microprocessors leads to a 4% gain in the estimated end user surplus.
ER  -