Specification Issues and Confidence Intervals in Unilateral Price Effects Analysis

This paper contributes to the economics and econometrics literature on unilateral effects analysis. It introduces the Rotterdam demand system; considers the effect and importance of demand restrictions for minimizing the mean squared error of price simulations; demonstrates that approximate price changes are often misleading indicators of exact price changes; and uses bootstrap techniques to determine confidence intervals and standard errors for simulated price changes, allowing determination not only of their economic significance but also of their statistical significance