This two day course will study applications of discrete choice models to demand estimation in industrial organization.
This two-day course will cover topics related to the estimation of discrete choice demand models. The course will use Stata to estimate these models and will focus on 1-2 applications in industrial organization. The course will cover modeling issues (specification), data issues (aggregate vs. micro data), data cleaning, imputation, estimation, random coefficients, and dealing with endogeneity. The course will also cover estimation of demand elasticities, marginal costs and some issues around merger simulation.
The course will cover the following topics:
Discrete choice demand models
- Logit and nested logit
- Mixed logit
- Endogeneity
Demand elasticities and merger analysis
Data
- Data problems
- Microeconomic data vs. aggregate data
- Single market vs multiple market
Applications (using Stata)
- Estimation of demand for local bus service
- Estimation of demand for airline travel