TY  - JOUR
AU  - Petrin,Amil
AU  - Train,Kenneth
TI  - Omitted Product Attributes in Discrete Choice Models
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9452
PY  - 2003
Y2  - January 2003
UR  - http://www.nber.org/papers/w9452
L1  - http://www.nber.org/papers/w9452.pdf
N1  - Author contact info:
Amil Petrin
Department of Economics
University of Minnesota
4-101 Hanson Hall
Minneapolis, MN 55455
Tel: 612/625-0145
Fax: 612/624-0209
E-Mail: petrin@umn.edu

Kenneth Train
UC, Berkeley
Department of Economics
549 Evans Hall # 3880
Berkeley CA 94720-3880
E-Mail: train@econ.berkeley.edu
AB  - 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.
ER  -