method is applied to gasoline demand in the United States and is applicable to other goods. The method uses shape … price responsiveness of gasoline demand and the way responses vary across the income distribution. We find that price …This paper develops a new method for estimating a demand function and the welfare consequences of price changes. The …

group rather than the true individual value. In consumer demand this form of measurement error is present because the price … show the importance of such measurement errors for the estimation of demand in a setting with nonseparable unobserved … heterogeneity. We develop a consistent estimator using external information on the true distribution of prices. Examining the demand …