Quantifying the Benefits of Multifuel Cars: An Application of Random-Coefficients Logit Model

This paper tries to measure the welfare gains from technological innovation, focusing on the most important technological breakthough of Brazilian auto industry during the last decade: the so-called \ ex-fuel" cars, able to operate using various fuel types. In order to do that, initially a review of the literature was carried out, both on the evolution of the technolgy as well as on the valuation of new goods. On the empirical part, an econometric estimation of a demand relation using Random Coecient Logit model, on the other hand led to a welfare estimate, for the perfect competition assumption, of about 1.2 thousand Reais per family, in the same period, using the perfect competition assumption and just one thousand assuming differentiated products competition.