Estimation and Welfare Analysis with Large Demand SystemsJournal of Business and Economics Statistics (2004)
We develop an approach for estimating individual or household level preferences for a large set of quality-differentiated goods and for constructing Hicksian welfare measures within the demand system framework. Our approach uses a maximum simulated likelihood procedure to recover estimates of the structural parameters and a multistage, Monte Carlo Markov chain algorithm for constructing Hicksian consumer surplus estimates. We illustrate our approach with a recreation dataset consisting of day trips to 62 Mid-Atlantic beaches.
Citation InformationRoger von Haefen, Daniel Phaneuf and George R Parsons. "Estimation and Welfare Analysis with Large Demand Systems" Journal of Business and Economics Statistics Vol. 22 Iss. 2 (2004)
Available at: http://works.bepress.com/george_parsons/10/