In this paper we provide an algorithm for estimating characteristic based demand models from alternative data sources, and apply it to new data on the market for passenger vehicles. We ﬁnd that, provided care is taken in constructing the demand system and rich enough data are available, the characteristic based model can both rationalize existing results and provide realistic out of sample predictions.
Product Diﬀerentiation, Autos, Demand Estimation
JEL Classification Codes: D43
Published in Journal of Political Economy (2004), 112(1): 68-104 [JSTOR]