Flexible Demand Estimation with Search Data
Title | Flexible Demand Estimation with Search Data PDF eBook |
Author | Tomomichi Amano |
Publisher | |
Pages | 27 |
Release | 2022 |
Genre | Demand (Economic theory) |
ISBN |
Traditional methods for estimating demand are not always well-suited to online markets, where individual products are sold infrequently, unobserved factors such as webpage layout drive substitution, and often only a limited set of product characteristics is observed. We propose a demand model where browsing data -- which is abundant in many online settings -- is used to infer individual consumers' consideration sets. In our model, the underlying variables which drive consideration can be correlated arbitrarily across products. We estimate the model through a constraint maximization approach, based on the insight that these correlations should rationalize the product-pair co-search frequencies that are observed in the data. In turn, these correlations make it possible to estimate more flexible substitution patterns. We apply the model to data from an online retailer, recover the elasticity matrix, and solve for optimal prices.
Large-scale Demand Estimation with Search Data
Title | Large-scale Demand Estimation with Search Data PDF eBook |
Author | Tomomichi Amano |
Publisher | |
Pages | 27 |
Release | 2018 |
Genre | |
ISBN |
Many online markets are characterized by sellers that stock large numbers of products and sell each product infrequently. At the same time, consumer browsing information is typically tracked by online retailers and is much more abundant than purchase data. We propose a demand model that caters to this type of setting. Our approach, which is based on search and purchase data, is computationally light and allows for flexible substitution patterns. We apply the model to a data set containing browsing and purchase information from a retailer stocking over 500 products, recover the elasticity matrix, and solve for optimal prices for the entire assortment.
Demand Estimation with Text and Image Data
Title | Demand Estimation with Text and Image Data PDF eBook |
Author | Giovanni Compiani |
Publisher | |
Pages | 0 |
Release | 2023 |
Genre | |
ISBN |
We propose a demand estimation method that allows researchers to estimate substitution patterns from unstructured image and text data. We first employ a series of machine learning models to measure product similarity from products' images and textual descriptions. We then estimate a nested logit model with product-pair specific nesting parameters that depend on the image and text similarities between products. Our framework does not require collecting product attributes for each category and can capture product similarity along dimensions that are hard to account for with observed attributes. We apply our method to a dataset describing the behavior of Amazon shoppers across several categories and show that incorporating texts and images in demand estimation helps us recover a flexible cross-price elasticity matrix.
Demand System Specification and Estimation
Title | Demand System Specification and Estimation PDF eBook |
Author | |
Publisher | |
Pages | 234 |
Release | 1992 |
Genre | Consumer behavior |
ISBN | 0195356438 |
This study of demand analysis links economic theory to empirical analysis. It demonstrates how theory can be used to specify equation systems suitable for empirical analysis, and discusses demand systems estimation using both per capita time series and household budget data.
Demand Estimation with Flexible Income Effect
Title | Demand Estimation with Flexible Income Effect PDF eBook |
Author | Shuhei Kaneko |
Publisher | |
Pages | 0 |
Release | 2023 |
Genre | |
ISBN |
This paper proposes an empirical model of a discrete choice demand with a nonparametric income effect specification. The model allows for the flexible estimation of demand curvature, which has significant implications for pricing and policy analysis in oligopolistic markets. We adopt a sieve approximation method with shape restrictions from econometrics literature in a nested fixed-point algorithm. Applying this framework to the Japanese automobile market, we conduct a pass-through analysis of feebates and merger simulations. Our model predicts a higher pass-through rate and more significant merger effects than a simple logit model, highlighting the importance of flexibly estimating demand curvature.
Incorporating Search and Sales Information in Demand Estimation
Title | Incorporating Search and Sales Information in Demand Estimation PDF eBook |
Author | Ali Hortaçsu |
Publisher | |
Pages | |
Release | 2021 |
Genre | Commerce |
ISBN |
We propose an approach to modeling and estimating discrete choice demand that allows for a large number of zero sale observations, rich unobserved heterogeneity, and endogenous prices. We do so by modeling small market sizes through Poisson arrivals. Each of these arriving consumers then solves a standard discrete choice problem. We present a Bayesian IV estimation approach that addresses sampling error in product shares and scales well to rich data environments. The data requirements are traditional market-level data and measures of consumer search intensity. After presenting simulation studies, we consider an empirical application of air travel demand where product-level sales are sparse. We find considerable variation in demand over time. Periods of peak demand feature both larger market sizes and consumers with higher willingness to pay. This amplifies cyclicality. However, observed frequent price and capacity adjustments offset some of this compounding effect.
Demand-side Flexibility in Smart Grid
Title | Demand-side Flexibility in Smart Grid PDF eBook |
Author | Roya Ahmadiahangar |
Publisher | Springer Nature |
Pages | 66 |
Release | 2020-05-08 |
Genre | Technology & Engineering |
ISBN | 9811546274 |
This book highlights recent advances in the identification, prediction and exploitation of demand side (DS) flexibility and investigates new methods of predicting DS flexibility at various different power system (PS) levels. Renewable energy sources (RES) are characterized by volatile, partially unpredictable and mostly non-dispatchable generation. The main challenge in terms of integrating RES into power systems is their intermittency, which negatively affects the power balance. Addressing this challenge requires an increase in the available PS flexibility, which in turn requires accurate estimation of the available flexibility on the DS and aggregation solutions at the system level. This book discusses these issues and presents solutions for effectively tackling them.