description Aviv Nevo Overview
Aviv Nevo is an Israeli-American economist at the University of Pennsylvania's Wharton School, known for his contributions to empirical industrial organization and demand estimation in differentiated product markets. He previously held a faculty position at Northwestern University. Nevo's widely cited research extends the Berry-Levinsohn-Pakes random-coefficients discrete choice framework, applying it to analyze consumer demand for products such as ready-to-eat cereal and to evaluate the competitive effects of proposed mergers. His methodologies have been adopted by competition authorities in antitrust enforcement.
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What is Aviv Nevo's contribution to demand estimation in economics?
Nevo is known for applying the BLP (Berry-Levinsohn-Pakes) random-coefficients logit model to estimate consumer demand in differentiated product markets, with his study of the U.S. ready-to-eat cereal industry published in Econometrica in 2001 becoming a benchmark. The paper demonstrated how demand estimation can be used to simulate merger effects and measure market power.
Where does Aviv Nevo work?
Nevo is a professor at the Wharton School of the University of Pennsylvania, where he holds appointments in both the economics department and the marketing department. He previously taught at Northwestern University and the University of California, Berkeley.
What did Aviv Nevo find in his cereal industry research?
In his influential study, Nevo estimated that the high price-cost margins in the ready-to-eat cereal industry could be explained by product differentiation and brand loyalty rather than collusion among manufacturers. His methodology became the standard approach for estimating demand in markets with many differentiated products.
Has Aviv Nevo served in a government antitrust role?
Nevo served as Director of the Bureau of Economics at the Federal Trade Commission (FTC), where he advised on antitrust enforcement and consumer protection matters. His expertise in demand estimation and market definition informed the agency's evaluation of proposed mergers and competitive effects.
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