Demand Estimation Using Discrete Choice Model

This study focuses on the goods market analysis using a discrete choice model. The study objective is to analyze the demand for the product by assessing consumer choice. In order to apply the theoretical knowledge acquired on the basis of the analysis of the existing literature on the subject, it is necessary to select the commodities market, which will be explored. Thus, the juice market was selected. This market is quite broad with respect to the proposed differentiated alternatives to it. These contain a variety of characteristics of the goods which may have an impact on consumer choice, such as price, brand, taste, etc. The data were provided by one of the largest retail chains in the city of Perm, with respect to a supermarket for 2012. Demand estimation involves the construction of utility function of consumers, which is the economic interpretation of the model. In this paper is used for the empirical analysis the logit model specification.