Niche post: Doing a lit review, it& #39;s amazing how confused the literature seemed to be about identification in BLP (demand side) given how quickly it became the workhorse. As recently as this year (!) I& #39;ve had smart people claim that some parameters of BLP aren& #39;t identified 1/

My impression is that this was maybe a concern 20 years ago, but it really shouldn& #39;t be at this point. We want to estimate demand functions wrt price. BLP-style demand is just one nice way to allow for nonlinearities in that function 2/

I& #39;m contractually obligated to mention FRAC, which actually makes this crystal clear. If you approximate BLP this way, you see that the mysterious nonlinear parameters are just coefficients on a regressor that looks a lot like p^2 (plus some extra terms) 3/

So identification in the simplest BLP-style demand model is about as simple as a logit model w/ linear and quad terms in price. Nothing mysterious

I& #39;m sure this post is too niche, but we need more IO method content on this website. Feel free to argue if I& #39;m oversimplifying! 4/4