NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Omitted Product Attributes in Discrete Choice Models

Amil Petrin, Kenneth Train

NBER Working Paper No. 9452
Issued in January 2003
NBER Program(s):   IO

We describe two methods for correcting an omitted variables problem in discrete choice models: a fixed effects approach and a control function approach. The control function approach is easier to implement and applicable in situations for which the fixed effects approach is not. We apply both methods to a cross-section of disaggregate data on customer's choice among television options including cable, satellite, and antenna. As theory predicts, the estimated price response rises substantially when either correction is applied. All of the estimated parameters and the implied price elasticities are very similar for both methods.

download in pdf format
   (209 K)

email paper

This paper is available as PDF (209 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w9452

Users who downloaded this paper also downloaded these:
Petrin w8227 Quantifying the Benefits of New Products: The Case of the Minivan
Ackerberg and Rysman w8798 Unobserved Product Differentiation in Discrete Choice Models: Estimating Price Elasticities and Welfare Effects
Bajari and Benkard t0272 Demand Estimation With Heterogeneous Consumers and Unobserved Product Characteristics: A Hedonic Approach
Hausman Valuation of New Goods under Perfect and Imperfect Competition
Nevo t0221 A Research Assistant's Guide to Random Coefficients Discrete Choice Models of Demand
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us