Estimating Price Elasticities with Text and Images
with Sven Klaassen, Philipp Bach, Victor Chernozhukov, Martin Spindler, Suhas Vijaykumar
Abstract: Estimating elasticities is core in Economics and Marketing. This paper develops methods to utilize text and image data for estimating price elasticities using the double/debiased machine learning (DML) approach in a causal inference setting. The DML approach is extended to allow for multimodal confounding. We present an empirical analysis of causal inference using text and image data and compare the results with standard approaches relying only on tabular data to estimate price elasticities We find empirically that including text and images as confounders improve the estimation of price elasticities considerably as text and images are important containers. The paper contributes to the literature on causal inference by demonstrating the potential of text and image data.