Demand Model Simulation in R with Endogenous Prices and Unobservable Quality

The aim of the present routine is to simulate a demand equation with endogenous prices and unobservable product quality and to retrieve the original parameters using the Control Function (CF) approach. The CF approach is a very useful and simple method to obtain unbiased estimates. The present R code helps to understand the underlying structure of the endogeneity problem in demand estimations. Results support the important bias correction of the CF approach.

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Year of publication:	2014-09-18
Authors:	Toro Gonzalez, Daniel
Institutions:	Volkswirtschaftliche Fakultät, Ludwig-Maximilians-Universität München
Subject:	Control Function \| Demand Analisis \| Endogeneity

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Extent:	application/pdf
Series:	MPRA Paper.
Type of publication:	Book / Working Paper
Classification:	C13 - Estimation ; C15 - Statistical Simulation Methods; Monte Carlo Methods ; D49 - Market Structure and Pricing. Other ; E27 - Forecasting and Simulation
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011111377