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Dongling Huang and Christian Rojas
''The Outside Good Bias in Logit Models of Demand with Aggregate Data''
( 2013, Vol. 33 No.1 )
The logit model is the most popular tool for estimating demand in differentiated products markets. However, in its aggregate version, practitioners have to “guess” the size outside good. We propose a way to remove the bias created by an inaccurate guess in simpler versions of the model.
Keywords: Logit model, demand estimation, outside good, differentiated products
JEL: C1 - Econometric and Statistical Methods: General
D4 - Market Structure and Pricing: General
Manuscript Received : Jul 26 2012 Manuscript Accepted : Jan 23 2013

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