Demand estimation and merger simulations for drugs: Logits v. AIDS

Farasat A. S. Bokhari; Franco Mariuzzo

doi:10.1016/j.ijindorg.2018.01.005

Demand estimation and merger simulations for drugs: Logits v. AIDS

Farasat A. S. Bokhari, Franco Mariuzzo

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Abstract

We use ADHD drugs sales data from 2000-2003 and compare estimates of elasticities and merger simulations from three different demand models. Models include logit, random coefficients logit, and conditional AIDS demand model with multistage budgeting. The magnitude of cross-price elasticities is larger in the third model in comparison to the first two, and some of the cross-price elasticities are estimated to be negative. Hypothetical merger simulations show larger price effects for the multistage AIDS model in comparison to the discrete choice models.

Original language	English
Pages (from-to)	653-685
Number of pages	33
Journal	International Journal of Industrial Organization
Volume	61
Early online date	1 Feb 2018
DOIs	https://doi.org/10.1016/j.ijindorg.2018.01.005
Publication status	Published - Nov 2018

Keywords

Demand systems
AIDS demand
logit
random coefficients logit
discrete choice
merger simulations
psychostimulant drugs

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

Access to Document

10.1016/j.ijindorg.2018.01.005

Accepted manuscriptAccepted author manuscript, 1.45 MBLicence: CC BY-NC-ND

Cite this

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abstract = "We use ADHD drugs sales data from 2000-2003 and compare estimates of elasticities and merger simulations from three different demand models. Models include logit, random coefficients logit, and conditional AIDS demand model with multistage budgeting. The magnitude of cross-price elasticities is larger in the third model in comparison to the first two, and some of the cross-price elasticities are estimated to be negative. Hypothetical merger simulations show larger price effects for the multistage AIDS model in comparison to the discrete choice models.",

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