Discrete choice cannot generate demand that is additively separable in own price

C-Tier
Journal: Economics Letters
Year: 2012
Volume: 116
Issue: 1
Pages: 129-132

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We show that in a unit demand discrete choice framework with at least three goods, demand cannot be additively separable in own price. This result sharpens the analogous result of Jaffe and Weyl (2010) in the case of linear demand and has implications for testing of the discrete choice assumption, out-of-sample prediction, and welfare analysis.

Technical Details

RePEc Handle
repec:eee:ecolet:v:116:y:2012:i:1:p:129-132
Journal Field
General
Author Count
2
Added to Database
2026-01-25