Omitted cross-price variable biases in the linear travel cost model: correcting common misperceptions
1985
Caulkins, P.P. | Bishop, R.C. | Bouwes, N.W.
Extract: The purpose of this paper is to make explicit the behavioral relationship of these price proxy variables, explain what factors govern this relationship, and present the rules and conditions for determining the nature of the bias when the cross-price terms are omitted from the estimated, linear travel-cost demand equation. While a simplified two-site case is used in this analysis, the insights gained can be employed in analyzing more complicated, multiple-site situations.
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