Bias in Reduced-Form Estimates of Pass-through

We show that, in general, consistent estimates of cost pass-through are not obtained from reduced-form regressions of price on cost. We derive a formal approximation for the bias that arises even under standard orthogonality conditions. We provide guidance on the conditions under which bias may frustrate inference.

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Year of publication:	2014-02
Authors:	Mackay, Alexander MacKay ; Miller, Nathan H. ; Remer, Marc ; Sheu, Gloria
Institutions:	Antitrust Division, Department of Justice

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Extent:	text/html
Series:	EAG Discussions Papers.
Type of publication:	Book / Working Paper
Notes:	Number 201401 9 pages
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010751981