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.
I wish to thank Charles Manski for comments on an earlier draft. This article was prepared for the Annual Review of Economics, Volume 3. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
Aviv Nevo, 2011. "Empirical Models of Consumer Behavior," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 51-75, 09. citation courtesy of