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| RE: What is the meaning of Z, the demand shifter in the aidsEst function? [ Reply ] By: Arne Henningsen on 2012-05-03 22:22 | [forum:5673] |
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Dear Dan I am not 100% sure if I understood your question correctly. I guess that you refer to following equation: alpha_i^* = alpha_i + sum(j=1 to m) delta_ij z_j for all i=1,...,n, Here, n is the number of categories in your demand model; m is the number of shifter variables, and z_j is the j-th shifter variable. If you calculate the elasticities for the t-th observation, z_j must be the observed numerical value of z_j at the t-th observation; if you calculate the elasticities at the sample mean, you must use the mean of variable z_j; and so on... /Arne |
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| What is the meaning of Z, the demand shifter in the aidsEst function? [ Reply ] By: Dan Lim-Johnson on 2012-04-30 07:22 | [forum:5663] |
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I understand that when you incorporate demand shifts into the aidsEst equation, you must calculate the new alphas by hand then run it again with the deltas dropped out. However, I am not sure what Zi is. Is it just the numerical number of the demand shift variable? ie, c(1,2,.........nrows)? Thanks! |
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