Monotonic regression based on Bayesian P-splines: an application to estimating price response functions from store-level scanner data

Generalized additive models have become a widely used instrument for flexible regression analysis. In many practical situations, however, it is desirable to restrict the flexibility of nonparametric estimation in order to accommodate a presumed monotonic relationship between a covariate and the response variable. For example, consumers usually will buy less of a brand if its price increases, and therefore one expects a brand's unit sales to be a decreasing function in own price. We follow a Bayesian approach using penalized B-splines and incorporate the assumption of monotonicity in a natural way by an appropriate specification of the respective prior distributions. We illustrate the methodology in an empirical application modeling demand for a brand of orange juice and show that imposing monotonicity constraints for own- and cross-item price effects improves the predictive validity of the estimated sales response function considerably

Semiparametric Multinomial Logit Models for Analysing Consumer Choice Behaviour

The multinomial logit model (MNL) is one of the most frequently used statistical models in marketing applications. It allows to relate an unordered categorical response variable, for example representing the choice of a brand, to a vector of covariates such as the price of the brand or variables characterising the consumer. In its classical form, all covariates enter in strictly parametric, linear form into the utility function of the MNL model. In this paper, we introduce semiparametric extensions, where smooth effects of continuous covariates are modelled by penalised splines. A mixed model representation of these penalised splines is employed to obtain estimates of the corresponding smoothing parameters, leading to a fully automated estimation procedure. To validate semiparametric models against parametric models, we utilise proper scoring rules and compare parametric and semiparametric approaches for a number of brand choice data sets

Semiparametric Stepwise Regression to Estimate Sales Promotion Effects

Kalyanam and Shively (1998) and van Heerde et al. (2001) have proposed semiparametric models to estimate the influence of price promotions on brand sales, and both obtained superior performance for their models compared to strictly parametric modeling. Following these researchers, we suggest another semiparametric framework which is based on penalized B-splines to analyze sales promotion effects flexibly. Unlike these researchers, we introduce a stepwise procedure with simultaneous smoothing parameter choice for variable selection. Applying this stepwise routine enables us to deal with product categories with many competitive items without imposing restrictions on the competitive market structure in advance. We illustrate the new methodology in an empirical application using weekly store-level scanner data

A semiparametric approach to estimating reference price effects in sales response models

It is well known that store-level brand sales may not only depend on contemporaneous influencing factors like current own and competitive prices or other marketing activities, but also on past prices representing customer response to price dynamics. On the other hand, non- or semiparametric regression models have been proposed in order to accommodate potential nonlinearities in price response, and related empirical findings for frequently purchased consumer goods indicate that price effects may show complex nonlinearities, which are difficult to capture with parametric models. In this contribution, we combine nonparametric price response modeling and behavioral pricing theory. In particular, we propose a semiparametric approach to flexibly estimating price-change or reference price effects based on store-level sales data. We compare different representations for capturing symmetric vs. asymmetric and proportional vs. disproportionate price-change effects following adaptation-level and prospect theory, and further compare our flexible autoregressive model specifications to parametric benchmark models. Functional flexibility is accommodated via P-splines, and all models are estimated within a fully Bayesian framework. In an empirical study, we demonstrate that our semiparametric dynamic models provide more accurate sales forecasts for most brands considered compared to competing benchmark models that either ignore price dynamics or just include them in a parametric way

Bayesian Geoadditive Seemingly Unrelated Regression

Parametric seemingly unrelated regression (SUR) models are a common tool for multivariate regression analysis when error variables are reasonably correlated, so that separate univariate analysis may result in inefficient estimates of covariate effects. A weakness of parametric models is that they require strong assumptions on the functional form of possibly nonlinear effects of metrical covariates. In this paper, we develop a Bayesian semiparametric SUR model, where the usual linear predictors are replaced by more flexible additive predictors allowing for simultaneous nonparametric estimation of such covariate effects and of spatial effects. The approach is based on appropriate smoothness priors which allow different forms and degrees of smoothness in a general framework. Inference is fully Bayesian and uses recent Markov chain Monte Carlo techniques

Conjoint-Analyse und Marktsegmentierung

Die Marktsegmentierung zählt neben der Neuproduktplanung und Preisgestaltung zu den wesentlichen Einsatzgebieten der Conjoint-Analyse. Neben traditionell eingesetzten zweistufigen Vorgehensweisen, bei denen Conjoint-Analyse und Segmentierung in zwei getrennten Schritten erfolgen, stehen heute mit Methoden wie der Clusterwise Regression oder Mixture-Modellen neuere Entwicklungen, die eine simultane Segmentierung und Präferenzschätzung ermöglichen, zur Verfügung. Der Beitrag gibt einen Überblick über die vorliegenden methodischen Ansätze zur Verknüpfung von Conjoint-Analyse und Marktsegmentierung und zeigt die Vorzüge simultaner Conjointsegmentierungsmethoden gegenüber den in der Unternehmenspraxis noch immer weit verbreiteten zweistufigen Verfahren auf. Along with new product/concept identification and pricing, market segmentation ranks among the primary purposes in commercial conjoint applications. Traditionally, this conjoint segmentation has been accomplished by a two-step procedure, (1) either by first segmenting markets and subsequently estimating conjoint models at the segment level or (2) by first conducting conjoint analysis at the individual level and then clustering individual level part-worths. However, in recent years, some powerful techniques for simultaneously performing market segmentation and calibrating segment-level part-worths such as clusterwise regression procedures and mixture models have been proposed. This article provides an overview of existing conjoint segmentation methods and particularly focuses on the newer simultaneous approaches which offer substantial advantages compared to the traditional two-step procedures.Marktsegmentierung; Conjoint-Analyse ; Simultanverfahren;

Report on the First Working Group Meeting of the “AG Marketing”

This contribution reports on the first meeting of the new formed working group “Data Analysis and Classification in Marketing (AG Marketing)” of the data science society (GfKl) held at the KIT, Karlsruhe, November 14th – 15th, 2019. The abstracts of the presentations given reflect the ongoing trend to exploit a large variety of digital data sources for marketing purposes and the need for advanced and innovative analysis methods

Global, regional, and national burden of neurological disorders, 1990–2016 : a systematic analysis for the Global Burden of Disease Study 2016

Background: Neurological disorders are increasingly recognised as major causes of death and disability worldwide. The aim of this analysis from the Global Burden of Diseases, Injuries, and Risk Factors Study (GBD) 2016 is to provide the most comprehensive and up-to-date estimates of the global, regional, and national burden from neurological disorders. Methods: We estimated prevalence, incidence, deaths, and disability-adjusted life-years (DALYs; the sum of years of life lost [YLLs] and years lived with disability [YLDs]) by age and sex for 15 neurological disorder categories (tetanus, meningitis, encephalitis, stroke, brain and other CNS cancers, traumatic brain injury, spinal cord injury, Alzheimer's disease and other dementias, Parkinson's disease, multiple sclerosis, motor neuron diseases, idiopathic epilepsy, migraine, tension-type headache, and a residual category for other less common neurological disorders) in 195 countries from 1990 to 2016. DisMod-MR 2.1, a Bayesian meta-regression tool, was the main method of estimation of prevalence and incidence, and the Cause of Death Ensemble model (CODEm) was used for mortality estimation. We quantified the contribution of 84 risks and combinations of risk to the disease estimates for the 15 neurological disorder categories using the GBD comparative risk assessment approach. Findings: Globally, in 2016, neurological disorders were the leading cause of DALYs (276 million [95% UI 247–308]) and second leading cause of deaths (9·0 million [8·8–9·4]). The absolute number of deaths and DALYs from all neurological disorders combined increased (deaths by 39% [34–44] and DALYs by 15% [9–21]) whereas their age-standardised rates decreased (deaths by 28% [26–30] and DALYs by 27% [24–31]) between 1990 and 2016. The only neurological disorders that had a decrease in rates and absolute numbers of deaths and DALYs were tetanus, meningitis, and encephalitis. The four largest contributors of neurological DALYs were stroke (42·2% [38·6–46·1]), migraine (16·3% [11·7–20·8]), Alzheimer's and other dementias (10·4% [9·0–12·1]), and meningitis (7·9% [6·6–10·4]). For the combined neurological disorders, age-standardised DALY rates were significantly higher in males than in females (male-to-female ratio 1·12 [1·05–1·20]), but migraine, multiple sclerosis, and tension-type headache were more common and caused more burden in females, with male-to-female ratios of less than 0·7. The 84 risks quantified in GBD explain less than 10% of neurological disorder DALY burdens, except stroke, for which 88·8% (86·5–90·9) of DALYs are attributable to risk factors, and to a lesser extent Alzheimer's disease and other dementias (22·3% [11·8–35·1] of DALYs are risk attributable) and idiopathic epilepsy (14·1% [10·8–17·5] of DALYs are risk attributable). Interpretation: Globally, the burden of neurological disorders, as measured by the absolute number of DALYs, continues to increase. As populations are growing and ageing, and the prevalence of major disabling neurological disorders steeply increases with age, governments will face increasing demand for treatment, rehabilitation, and support services for neurological disorders. The scarcity of established modifiable risks for most of the neurological burden demonstrates that new knowledge is required to develop effective prevention and treatment strategies. Funding: Bill & Melinda Gates Foundation