January 2016
Beginner
562 pages
21h 17m
English
Content preview from Handbook of Media Economics, vol 1A
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bundles. The time-watching data allows the authors to attribute greater value to those
channels that are viewed more intensely.
In
Crawford and Yurukoglu (2012), the utility of household i from time t
ic
spent
watching channel c in bundle j is
ν
ij
¼
X
c2C
j
γ
ic
log 1 + t
ic
ðÞ, (3.11)
where C
j
is the set of channels in cable bundle j.
4
The consumer allocates total hours per
day across the various channels plus an outside good of not watching television. The taste
parameters γ
ic
depend on consumer demographics. Consumer utility for bundle j then
depends on the optimized values of the channel utility as well as on the price of the bun-
dle, on the observed (z
j
) and unobserved (ξ
j
) characteristics of the bundle, and on random
“logit” error terms
u
ij
¼ν
ij
+ z
j
ψ αp
j
+
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