Semi-Nonparametric Estimation of Consumer Search Costs

J.L. Moraga González, Z. Sandor, M. Wildenbeest

Research output: Contribution to JournalArticleAcademicpeer-review


SUMMARY: This paper studies the estimation of the distribution of non-sequential search costs. We show that the search cost distribution is identified by combining data from multiple markets with common search technology but varying consumer valuations, firms' costs, and numbers of competitors. To exploit such data optimally, we provide a new method based on semi-nonparametric estimation. We apply our method to a dataset of online prices for memory chips and find that the search cost density is essentially bimodal, such that a large fraction of consumers searches very little, whereas a smaller fraction searches a relatively large number of stores. © 2012 John Wiley & Sons, Ltd.
Original languageEnglish
Pages (from-to)1205-1223
JournalJournal of Applied Econometrics
Issue number7
Publication statusPublished - 2013


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