The application of probit,logit, and tobit in marketing: A review

Recent work on the analysis of qualitative dependent variables having considerable potential in marketing research are reviewed and illustrated. In particular, three related models, probit, logit, and tobit, are discussed in a nontechnical manner. In the last few years, there has been a resurgence of interest among biologists, economists, and other social scientists in developing and generalizing these three models. Yet, despite their apparent utility in marketing research, there have been only one or two rather limited applications to date. The object of this review is to enable researchers to evaluate these models and to relate them to their existing statistical procedures. The models are defined and related to the multivariate methods commonly used in marketing research. Second, the theoretical problems associated with using regression analysis and similar procedures on qualitative data are noted and the assumptions needed to resolve such problems are presented. Third, marketing applications are reviewed and an illustration of a general form of the probit model is evaluated and compared.     

Marketing strategies,financial structure,and innovation in U.K. retailing

This study examines the pattern by which retailers have adapted to recent changes in consumer markets. Information was obtained on the marketing strategies and financial structures of 88 of the leading U.K. retailers. The first section identifies the key environmental developments of the later 1970's and appraises their impact on retailers. In the second section, the methods by which retailers have sought to adapt to these changes are outlined. Finally, a model is developed which distinguishes successful from unsuccessful retailing strategies and provides a methodology for evaluating alternative approaches to market positioning.     

Fully nonmetric estimation of a continuous nonlinear conjoint utility function

The special conjoint-analysis problem of estimating the parameters of a continuous nonlinear utility function from ordinal rank order data is investigated. A special purpose estimation method, called NONCON, is proposed that offers two advantages: First, it is capable of directly maximizing Kendall's rank order correlation coefficient T as the appropriate measure of goodness of fit. Second, it requires less computational effort than competing procedures using general purpose conjointanalysis programs. The superiority of NONCON is demonstrated for the estimation of a continuous nonlinear two-parameter utility function the parameters of which serve as input for the optimization of sales force compensation schemes.     

A comparison of Japanese and American business negotiations

The determinants of the outcomes of business negotiations in two cultures are investigated in a laboratory experiment. The most important causal factor in Japanese negotiations was found to be the role (i.e., buyer or seller) of the negotiator. Japanese buyers consistently achieved higher bargaining solutions than Japanese sellers. The primary causal factor in negotiations between Americans was the information content of bargaining strategies. Americans to whom bargaining partners gave information more freely achieved higher bargaining solutions.     

Expectancy-value attitude models an analysis of critical measurement issues

Criteria for scaling beliefs and evaluations in the Fishbein model are considered, and a procedure is developed and illustrated for the proper test of multiplicative models. Hierarchical regression is shown to be a valid method for testing interaction hypotheses even when measures are only interval or ordinal scaled.     

A method for detecting nonlinear effects in cross-sectional survey data

This paper describes a little-used method which allows marketing research to move beyond estimating linear relations in exploratory research. Initially developed by Fisher and extended by the author, this decomposition method is systematic, flexible and answers directly questions relating to the shape of the relationship among a hypothesized set of variables. Two examples are provided to illustrate the usefulness of the method to marketing researchers.     

Monetary policy and the daily behavior of interest rates

It is possible that previous research has failed to detect significant variation in the ex-ante real interest rate because the Federal Reserve follows a policy designed to stabilize the real rate. If the Fed is successful, there will be little month-to-month variation in the real rate. Nonetheless, research to date has relied on monthly or quarterly data. This paper presents the results of new tests that use daily data in an attempt to detect short-term variation in the ex-ante real rate. Though the tests reveal that the real rate is not constant, most of the detected variation is related to reserve settlement on Wednesday.     

Hedonic theory,marketing research,and the analysis of complex goods

It is argued that marketing people may benefit from adopting the hedonic methodology used by economists, especially when analysing price/quality relationships, but also in order to make better evaluations of differentiated products. Hence the paper introduces the theoretical and empirical aspects of hedonic analysis and gives some suggestions for the improvement of the econometric analysis of price/quality relationships. In addition, the application of the hedonic methodology is shown on a sample of 528 Danish house transactions, and the advantages of hedonic analysis are demonstrated.     

Capital cost and adjusted present value: Reconciliation and amplification

In recent years the adjusted present value method has been propounded for capital budgeting analysis. A comparison of the standard cost of capital approach to the adjusted present value method indicates that the two analyses produce exactly equivalent present value appraisals, as long as the enterprise contemplating the asset has a policy of keeping the degree of leverage constant. The conclusions reached are independent of the firm's target leverage position matching its present posture.     

Managerial bias in anticipated images of competing shopping areas

Several dimensions of consumer retail patronage decisions that affect the firm's marketing program are investigated. In particular, the focus of the research extends previous research in the area to investigate the images held by consumers of shopping malls rather than individual stores. Second, the ability of store managers to accurately predict the image held by consumers both of their own shopping area and of a competitor's shopping area is investigated. This is designed to evaluate the ability of managers to predict consumer perceptions irrespective of their own beliefs. Finally, differences in the perceptions of two potential market segments are compared. Manager ability to differentiate between segments is noted. The implications for marketing programming decisions and the contribution the research makes to the body of literature on image measurement are discussed.     

Towards an alternative theory of the advertising communication process?

Several findings reported by researchers working in quite different areas suggest that individuals may be able to receive advertising in a way which is very different from the advertising communication process. Here, some of these findings are presented. They derive from studies of picture perception, of mere exposure, of brain lateralization, of emotion formation, of attention processes, and from new approaches to content analysis. Finally, the need for a revised view on how advertising works is emphasized.     

Inflation,currency exchange rates,and the international securities markets

A time-state-preference model of an efficient and complete international financial market is employed to investigate the conditions under which the international Fisher Effect will hold, and the forward currency exchange rate will be an unbiased estimate of the future spot rate. The presence of stochastic inflation within countries in the fiat-currency prices of real goods will destroy both relationships, even in the absence of any institutional imperfections or trading barriers. Similarly, expected inflation rate differentials across countries will not coincide with spot-versus-forward currency exchange rate differentials.