Abstract
Block rate pricing is often applied to income taxation, telecommunication services, and brand marketing, in addition to its best-known application in public utility services. Under block rate pricing, consumers face piecewise-linear budget constraints. A discrete/continuous choice approach is usually used to account for piecewise-linear budget constraints in demand and price endogeneity. A recent study proposed a method to incorporate a separability condition ignored by previous studies, by implementing a Markov chain Monte Carlo simulation based on a hierarchical Bayesian approach. To extend this approach to panel data, our study proposes Bayesian hierarchical models incorporating random and fixed individual effects.
Original language | English |
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Pages (from-to) | 365-386 |
Number of pages | 22 |
Journal | Japanese Economic Review |
Volume | 62 |
Issue number | 3 |
DOIs | |
Publication status | Published - 2011 Sep |
Keywords
- C11
- C23
- C24
- Q25
ASJC Scopus subject areas
- Economics and Econometrics