A Market Basket Analysis Conducted with a Multivariate Logit Model

The following research is guided by the hypothesis that products chosen on a shopping trip in a supermarket can indicate the preference interdependencies between different products or brands. The bundle chosen on the trip can be regarded as the result of a global utility function. More specifically: the existence of such a function implies a cross-category dependence of brand choice behavior. It is hypothesized that the global utility function related to a product bundle results from the marketing-mix of the underlying brands. Several approaches exist to describe the choice of specific categories from a set of many alternatives. The models are discussed in brief; the multivariate logit approach is used to estimate a model with a German data set.market basket analysis, multivariate logit model, brand choice behavior, marketing-mix

Organic Food Consumption Patterns in France

This research addresses two important issues for the future expansion of organic consumption in France. The first one is related to knowing whether the organic choice is a permanent feature of consumer’s attitude or not: Do organic buyers occasionally pick one organic product or do they choose organic for “several” categories? The second issue concerns the impact of prices on buying organics which is revisited, distinguishing between capturing new consumers and increasing the demand coming from people already involved in organic markets. These questions are examined using the market basket approach; the price issue requires further estimations of demand models. The study relies on two staple food products, eggs and milk. The findings are : (i) choosing organic for one of the two items reinforces the probability of purchasing also the organic version of the second item; (ii) marginal reductions of the organic price have no impact on the decision of buying organic rather than conventional products; (iii) on the contrary, when people already purchase organic products, price elasticities are rather high; (iv) organic buyers’ demographic profile is not related to income neither to age nor to family size, but to the educational level.market basket approach, purchasing behavior, logit model, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, C35, D12, Q13,

A Market Basket Analysis Based on the Multivariate MNL Model

The following research is guided by the hypothesis, that products chosen on a shopping trip in a supermarket are an indicator of the preference interdependencies between different products or brands. The bundle chosen on the trip can be regarded as an indicator of a global utility function. More specific: the existence of such a function implies a cross–category dependence of brand choice behavior. It is hypothesized, that the global utility function related to a product bundle is the result of the marketing–mix of the underlying brands. To investigate the determinants of the choice for a certain bundle, a market basket forecast model is adopted from Russel and Petersen (2000) which uses a multivariate logistic function. The target of this paper is to apply a multivariate logistic approach to estimate a market basket model and to make a comparison between the results of the parameter estimates for a Canadian data set with a German one, which leads to a cross–cultural study. To our knowledge the adoption of this model type to a German data set is shown the first time. The estimation technique is derived from models of spatial statistics and will be explained here in much more detail than in Russel and Petersen (2000). The structure of the chosen product categories allow to discover the impact of certain marketing–mix variables and cross national comparison of market basket choice respectively product bundle buying behavior

A Combined Approach for Segment-Specific Analysis of Market Basket Data

There are two main research traditions for analyzing market basket data that exist more or less independently from each other, namely exploratory and explanatory model types. Exploratory approaches are restricted to the task of discovering cross-category interrelationships and provide marketing managers with only very limited recommendations regarding decision making. The latter type of models mainly focus on estimating the effects of category-level marketing mix variables on purchase incidences assuming cross-category dependencies. We propose a procedure that combines these two modeling approaches in a novel two-stage procedure for analyzing cross-category effects based on shopping basket data: In a data compression step we first derive a set of market basketprototypes and generate segments of households with internally more distinctive(complementary) cross-category interdependencies. Utilizing the information oncategories that are most responsible for prototype construction, segment-specificmultivariate logistic models are estimated in a second step. Based on the data-driven way of basket construction, we can show significant differences in cross-effects and related price elasticities both across segments and compared to the global (segment-unspecific) model

Differentiated effect of advertising: Joint vs. separate consumption

In a context of intense competition, cooperative advertising between firms is critical. Accordingly, the objective of this article is to analyze the potential differentiated effect of advertising on two basic consumption patterns: individual products (i.e. hotel, restaurant) vs. bundle (i.e. hotel + restaurant). This research adds to the extant literature in that, for the first time, this potential differentiated effect is examined through a hierarchical modelling framework that reflects the way people make their decisions: first, they decide whether to visit or not a region; second, whether to purchase an advertised product in that region; and third, whether to buy products together or separately at the region. The empirical analysis, applied to a sample of 11,288 individuals, shows that the influence of advertising is positive for the decisions to visit and to purchase; however, when it comes to the joint or separate consumption, advertising has a differentiated effect: its impact is much greater on the joint alternative (“hotel + restaurant”) than the separate options (“hotel” and “restaurant”). Also, the variable distance moderates the advertising effect

MODELING LARGE-SCALE CROSS EFFECT IN CO-PURCHASE INCIDENCE: COMPARING ARTIFICIAL NEURAL NETWORK TECHNIQUES AND MULTIVARIATE PROBIT MODELING

This dissertation examines cross-category effects in consumer purchases from the big data and analytics perspectives. It uses data from Nielsen Consumer Panel and Scanner databases for its investigations. With big data analytics it becomes possible to examine the cross effects of many product categories on each other. The number of categories whose cross effects are studied is called category scale or just scale in this dissertation. The larger the category scale the higher the number of categories whose cross effects are studied. This dissertation extends research on models of cross effects by (1) examining the performance of MVP model across category scale; (2) customizing artificial neural network (ANN) techniques for large-scale cross effect analysis; (3) examining the performance of ANN across scale; and (4) developing a conceptual model of spending habits as a source of cross effect heterogeneity. The results provide researchers and managers new knowledge about using the two techniques in large category scale settings The computational capabilities required by MVP models grow exponentially with scale and thus are more significantly limited by computational capabilities than are ANN models. In our experiments, for scales 4, 8, 16 and 32, using Nielsen data, MVP models could not be estimated using baskets with 16 and more categories. We attempted to and could calibrate ANN models, on the other hand, for both scales 16 and 32. Surprisingly, the predictive results of ANN models exhibit an inverted U relationship with scale. As an ancillary result we provide a method for determining the existence and extent of non-linear own and cross category effects on likelihood of purchase of a category using ANN models. Besides our empirical studies, we draw on the mental budgeting model and impulsive spending literature, to provide a conceptualization of consumer spending habits as a source of heterogeneity in cross effect context. Finally, after a discussion of conclusions and limitations, the dissertation concludes with a discussion of open questions for future research

FIxed, Float or Intermediate? A Cross-COuntry Time Series Analysis Of Exchange Rate Regimes

Since the collapse of the Bretton Woods system in the early 1970s, the choice of the exchange rate regime has been the subject of a lively debate in international finance. In this study, we investigate the determinants of three exchange rate regimes (fixed, flexible and intermediate). Our contribution to the literature is threefold: (i) we examine the unordered choice between the three regimes, with a multinomial logit model and cross-section data from 1982 to 1999. Previous studies are generally based on binomial and/or ordered models and use a short data span; (ii) we cover three different currency zones, the US dollar, the ECU/EMU, and the CFA Franc. The previous literature confines the analysis mainly to the US dollar zone; (iii) we compare two streams of the literature, the optimal currency area (OCA) and the currency crises (CC) models, and examine when each model explains the choice of exchange rate regimes better. Our approach provides a rich framework for the analysis of exchange regimes. Results with the OCA model show that the probability of choosing the flexible or intermediate regimes increases with a rise in fundamental variables (economy size, exchange rate volatility, capital mobility, inflation, low openness). Results with the CC model, however, suggest that policy variables and financial factors also affect the choice of the exchange regime. Adverse shocks to foreign factors (deteriorating current account, rising foreign liabilities, falling reserves) increase the probability of choosing the flexible or intermediate exchange regime over the fixed regime. Furthermore, we find that there is no one-size-fits-all model for all regions. The OCA model performs better in Europe and the Latin America, and the CC model in East Asia, Pacific regions and the CFA area. This result is consistent with the general perception that the currency crises that hit the international markets since the 1980s were fundamentals-driven in Europe and Latin America but financial-driven in Asia.Exchange rate regimes, optimum currency areas, currency crises, multinomial logit models.

Poverty, Gender, and Primary School Enrolment in Pakistan

Primary education is at the base of the pyramid of education, and is regarded as a fundamental human right today. In addition, it has several tangible social and economic effects. As an essential component of human capital, primary education plays an important role in the economic growth and development of a country.1 Its impact on several other socioeconomic variables has also been documented in the literature. To quote a few examples, Butt (1984) has found that five or more years of a farmer’s education lead to increased farm productivity, reduced use of farm labour, and increased use of yield augmenting inputs. Azhar (1988) also reports a significant relationship between the number of years of schooling and increase in farm output due to increased technical efficiency. Studies of the rates of returns to education attribute a positive value to the rate of returns to primary education.2 This means that by acquiring primary education one can increase one’s earnings. Every policy document prepared by the Government of Pakistan aims at attaining universal primary education. However, it is also true that each of these documents has advanced the date for achieving the target specified in the previous one. The net enrolment rates at the primary level show that we are still far from this target.