Empirical Models of Consumer Behavior
Models of consumer behavior play a key role in modern empirical Industrial Organization. In this paper, I survey some of the models used in this literature. In particular, I discuss two commonly used demand systems: multi-stage budgeting approaches and discrete choice models. I motivate their use and highlight some key modeling assumptions. I next briefly discuss key issues of estimation, and conclude by summarizing some extensions.
Published: Aviv Nevo, 2011. "Empirical Models of Consumer Behavior," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 51-75, 09.