@techreport{NBERw8425,
 title = "New Products, Quality Changes and Welfare Measures Computed From Estimated Demand Systems",
 author = "Aviv Nevo",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "8425",
 year = "2001",
 month = "August",
 URL = "http://www.nber.org/papers/w8425",
 abstract = {This paper examines the construction of a price index based on an estimated demand system.  In principle the method examined can produce a price index that accounts for introduction of new products and quality changes in existing products.  However, I isolate two key assumptions that have to be made in order to interpret the demand estimates into welfare measures. Using estimates of a brand-level demand system for ready-to-eat cereal I demonstrate the empirical importance of the assumptions.  For the data I use, depending on the interpretation of the demand estimates, a price index can range between a 35% percent increase over the five years examined to a 2.4% decrease.},
}