| This dissertation proposes a continuous choice model embedded in a hedonic approach to analyze the multiple product, multiple unit purchasing behavior. Compared to discrete product choice models, this model has an advantage of allowing a more flexible pattern of substitutability, and even complementarity, consistent with consumer behaviors of variety seeking and interdependence of product choices. Unlike traditional continuous demand models which restrict researchers to using market level data, it can be applied to micro level data with corner solutions. I use the Simulated Method of Moments to estimate the model, hence solve the problem of a high dimensional integration when there are numerous zero purchases.;I apply this methodology to estimate the demand for soft drinks. The results show that consumers seek variety over product characteristics such as flavor, packaging, and container size, and different degrees of substitutability and complementarity exist among products belong to same category. These will bring many implications on the marketing policy making. |
