Demand Estimation under Incomplete Product Availability
52 Pages Posted: 25 Apr 2009 Last revised: 5 May 2010
There are 2 versions of this paper
Demand Estimation Under Incomplete Product Availability
Date Written: May 3, 2010
Abstract
Incomplete product availability is an important feature of many markets; ignoring changes in availability may bias demand estimates. We study a new dataset from a wireless inventory system installed on 54 vending machines to track product availability every four hours. The data allows us to account for product availability when estimating demand, and provides a valuable source of variation for identifying substitution patterns. We develop a procedure that allows for changes in product availability even when availability is only observed periodically. We find significant differences in demand estimates, with the corrected model predicting significantly larger impacts of stock-outs on profitability.
Keywords: stock outs, demand estimation, product availability
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Nonparametric Identification of Multinomial Choice Demand Models with Heterogeneous Consumers
By Steven Berry and Philip A. Haile
-
Nonparametric Identification of Multinomial Choice Demand Models with Heterogeneous Consumers
By Steven Berry and Philip A. Haile
-
Empirical Industrial Organization: A Progress Report
By Liran Einav and Jonathan Levin
-
Identification in Differentiated Products Markets Using Market Level Data
By Steven Berry and Philip A. Haile
-
Identification in Differentiated Products Markets Using Market Level Data
By Steven Berry and Philip A. Haile
-
Identification in Differentiated Products Markets Using Market Level Data
By Steven Berry and Philip A. Haile
-
The Random Coefficients Logit Model is Identified
By Patrick Bajari, Jeremy T. Fox, ...
-
Estimating Primary Demand for Substitutable Products from Sales Transaction Data
By Gustavo Vulcano, Garrett Van Ryzin, ...