Econometric Models of the Demand for Quality-Differentiated Goods

This paper presents several models of the demand for quality differentiated goods in which the consumer decides which brand of product to select as well as how many units to buy. The models cover a variety of preference structures and can readily be estimated using standard techniques for switching regressions. From the fitted demand equations, one can calculate monetary measures of the welfare effects of changes in the price, quality, or variety of the brands. The models are then applied to data on households' demands for recreation sites i n the Boston area, and the values of the sites are calculated.