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Demand estimation without outside good shares

Federico A. Bugni, Joel L. Horowitz, Linqi Zhang

arXiv 22 Feb 2026 · Econometrics

arXiv:2602.19154 · PDF · DOI · OpenAlex · Extracted main text

Abstract

The BLP model is the workhorse framework in empirical IO and enables estimation of demand models for differentiated products using aggregate product shares. In practice, however, the share of the outside good is often unobserved. This paper studies identification and inference in the BLP model when the share of the outside good is unobserved. We show that the model is partially identified, and we derive sharp identified sets for structural parameters and equilibrium objects. We also develop inference procedures based on moment inequalities that deliver valid confidence sets for these structural parameters and equilibrium objects.

Citation extraction

27
references
58
in-text mentions
27
distinct cited
1
self-citations
13,883
main-text words

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Andrews, D. W. K. and X. Shi (2013) Inference Based on Conditional Moment Inequalities1.00093100%
2Chernozhukov, V., D. Chetverikov, and K. Kato (2015) Testing Many Moment Inequalities, Mimeo: MIT and UCLA and University of Tokyo0.87472100%
3Molchanov, I. and F. Molinari (2018) Random Sets in Econometrics0.8434375%
4Berry, S. T. and P. A. Haile (2021) Foundations of demand estimation, in0.64441100%
5Berry, S., J. Levinson, and A. Pakes (1995) Automobile Prices in Market Equilibrium0.64441100%
6Berry, S. T (1994) Estimating Discrete-Choice Models of Product Differentiation0.64441100%
7Molchanov, I (2005) Theory of Random Sets0.5113233%
8Zhang, L (2024) Identification and estimation of market size in discrete choice demand models, SSRN 4545848 self0.51121100%
9Backus, M., C. Conlon, and M. Sinkinson (2021) Common ownership and competition in the ready-to-eat cereal industry, Tech0.40511100%
10Berry, S., M. Carnall, and P. T. Spiller (2006) Airline hubs: costs, markups and the implications of customer heterogeneity0.40511100%

Showing the top 10 of 27 scored citations.