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SUMMARY:A BLP DEMAND MODEL OF PRODUCT-LEVEL MARKET SHARES WITH COMPLEMENTA
 RITY  - Ao Wang\, Assistant Professor\, University of Warwick
DTSTART:20221102T150000Z
DTEND:20221102T160000Z
UID:TALK185132@talks.cam.ac.uk
CONTACT:Emily Brown
DESCRIPTION:We propose a novel BLP model of demand for bundles that deals 
 with multiple purchases. It allows for Hicksian complementarity among prod
 ucts that are jointly purchased\, a feature that is ruled out by BLP model
 s of single products. Besides\, our model only relies on the availability 
 of aggregate data at product level (e.g.\, sales quantities) that are wide
 ly available. This feature enables researchers to fast implement reliable 
 policy evaluations without collecting individual-level choice data of bund
 les. We propose a two-step identification method that implies a straightfo
 rward GMM estimation procedure. We estimate the demand for Ready-To-Eat (R
 TE) cereal and milk in the US and investigate the policy implications of t
 heir complementarity. We find that RTE cereal and milk are overall complem
 entary. As a result\, policy change in one category may negatively affect 
 the other\, leading to new sources of welfare loss in classic policy simul
 ations such as mergers and sugar tax.\n\n
LOCATION:W2.02\, Cambridge Judge Business School
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