Incorporating heterogeneity with store-level aggregate data

This paper introduces a methodology to incorporate heterogeneity in the analysis of store level aggregate data. The proposed model is validated using two sets of scanner panel data, for tuna and ketchup, and their corresponding weekly aggregate data. The model recovers the true parameters with acceptable accuracy.The model has several advantages over the previous aggregate models, such as the linear model, the semilog model, and the log-log model. First, the cross-price elasticities estimated from the model show the asymmetric responses to the price promotions very close to those from the logit model applied to the panel data. Second, the model shows better prediction performance.     

地区竞争、土地供给结构与中国城市住房价格

为了分析地区竞争下地方政府间土地供给结构的策略互动及其对住房价格的影响,本文在归纳梳理中国土地供应法规特征的基础上,构建一个同时考虑居住用地需求和工业用地需求的两城市模型,探讨地方政府干预土地供给结构的动机及其经济后果,并基于2006—2015年城市面板数据对提出的理论假说进行检验。研究发现,在城市建设用地总量受约束的条件下,地方政府有激励以减少居住用地为代价提高工业用地供给,进行招商引资竞争;与市场起主导作用的情形相比,地方政府干预土地供给结构时,工业用地的供应量更高,居住用地的供应量则偏低,工业地价与居住用地的价格差异增大;地方政府对土地供给结构的干预,从供给和需求两方面共同推高了房价。此外,地方政府干预土地供给结构会影响到相邻地区的供地策略。研究对加快推进房地产市场长效机制改革、从供给侧解决高房价问题具有启示意义。     

How to generalize from a hierarchical model?

Models of consumer heterogeneity play a pivotal role in marketing and economics, specifically in random coefficient or mixed logit models for aggregate or individual data and in hierarchical Bayesian models of heterogeneity. In applications, the inferential target often pertains to a population beyond the sample of consumers providing the data. For example, optimal prices inferred from the model are expected to be optimal in the population and not just optimal in the observed, finite sample. The population model, random coefficients distribution, or heterogeneity distribution is the natural and correct basis for generalizations from the observed sample to the market. However, in many if not most applications standard heterogeneity models such as the multivariate normal, or its finite mixture generalization lack economic rationality because they support regions of the parameter space that contradict basic economic arguments. For example, such population distributions support positive price coefficients or preferences against fuel-efficiency in cars. Likely as a consequence, it is common practice in applied research to rely on the collection of individual level mean estimates of consumers as a representation of population preferences that often substantially reduce the support for parameters in violation of economic expectations. To overcome the choice between relying on a mis-specified heterogeneity distribution and the collection of individual level means that fail to measure heterogeneity consistently, we develop an approach that facilitates the formulation of more economically faithful heterogeneity distributions based on prior constraints. In the common situation where the heterogeneity distribution comprises both constrained and unconstrained coefficients (e.g., brand and price coefficients), the choice of subjective prior parameters is an unresolved challenge. As a solution to this problem, we propose a marginal-conditional decomposition that avoids the conflict between wanting to be more informative about constrained parameters and only weakly informative about unconstrained parameters. We show how to efficiently sample from the implied posterior and illustrate the merits of our prior as well as the drawbacks of relying on means of individual level preferences for decision-making in two illustrative case studies.

     

A DIFFUSION MODEL FOR ELECTRICITY PRICES

Starting from a simple supply/demand model for electricity, we obtain a diffusion (i.e., jumpless) model for spot prices which can exhibit price spikes. We estimate the parameters in the model using historical data from the Alberta and California markets. and compare this model with some others used for spot prices.     

The Advertising–price Relationship: Theory and Evidence

The relationship between advertising and price is important because the welfare effect of advertising depends upon the price effect of advertising. We attempt to provide a better understanding of the theoretical relationship between advertising and price. We establish theoretical conditions sufficient for advertising to raise prices. This will occur, for example, when firms play a supermodular game – a structure that considers the type of advertising (i.e., persuasive, image creating, or informative) and the effect that advertising has on a firm’s demand and costs. We also compare results from two simple duopoly models, one with horizontal and the other with vertical differentiation, and find that only the model with horizontal differentiation is supermodular for the forms of advertising that are thought to raise price (e.g., persuasive advertising). In consideration of these theoretical issues, we then develop an empirical model to determine whether advertising raises prices in the US brewing and cigarette industries.     

Investigating the unobserved heterogeneity in consumers’ sensitivity to the price of gasoline

We empirically examined how gasoline prices impact consumers’ shopping behaviors. Using individual panel data on gasoline transactions, we found that gasoline prices generally have a statistically and economically significant impact. However, our disaggregate analysis indicated that, across consumers, considerable heterogeneity was present in the underlying sensitivity to the price of gasoline and in the income effect, resulting from fluctuating gasoline prices. More interestingly, the significant effect of gasoline prices was largely driven by the consumers with large purchase volume, and consumers with the highest level of gasoline consumption remained almost perfectly insensitive to the price of gasoline. Such heterogeneity is also present in the effect of gasoline prices on grocery expenditures, and notably, consumers with the largest purchase volume were not associated with statistically significant changes in grocery expenditures. Theoretical background suggests that the financial constraints of consumers and primary vehicle use may explain about the differences in responses to gasoline prices. Results based on individual-level data allowed for a comprehensive understanding of how and how much gasoline prices affect consumer behaviors and showed that inelastic gasoline demand and the considerable income effect due to gasoline prices may not best describe the effect of gasoline prices.     

Learning About Computers: An Analysis of Information Search and Technology Choice

We estimate a dynamic model of how consumers learn about and choose between different brands of personal computers (PCs). To estimate the model, we use a panel data set that contains the search and purchase behavior of a set of consumers who were in the market for a PC. The data includes the information sources visited each period, search durations, as well as measures of price expectations and stated attitudes toward the alternatives during the search process. Our model extends recent work on estimation of Bayesian learning models of consumer choice behavior in environments characterized by uncertainty by estimating a model of active learning—i.e., a model in which consumers make optimal sequential decisions about how much information to gather prior to making a purchase. Also, following the suggestion of Manski (2003), we use our data on price expectations to model consumers’ price expectation process, and, following the suggestion of McFadden (1989a), we incorporate the stated brand quality information into our likelihood function, rather than modeling only revealed preference data.Our analysis sheds light on how consumer forward-looking price expectations and the process of learning about quality influence the consumer choice process. A key finding is that estimates of dynamic price elasticities of demand exceed estimates that ignore the expectations effect by roughly 50%. This occurs because our estimated expectations formation process implies that consumers expect mean reversion in price changes. This enhances the impact of a temporary price cut. Finally, while our work focuses specifically on the PC market, the modeling approach we develop here may be useful for studying a wide range of high-tech, high-involvement durable goods markets where active learning is important.JEL Classification: C15, C33, C35, C42, C51, C52, D83, D84     

Modeling the correct level of analysis in non-aggregated household panel data: A simulation approach

Multilevel models can deal with nested structures in household panel data to derive unbiased regression coefficients and standard errors for predictors from multiple hierarchical levels, e.g., households, products, or stores. Within the framework of multilevel modeling, researchers can apply purely nested models or cross-classified random effects models (CCREM). This paper explains the partially cross-classified structure in household panel data. Simulation study 1 demonstrates that standard errors for level-two predictors are severely downward biased when applying a nested three-level model to partially crossed data. Furthermore, the hierarchical location of interactions between predictors associated with two crossed levels is explained. Simulation study 2 demonstrates that with unbalanced real-world data, both standard errors and regression coefficients for interaction-level predictors can be biased when the “artificial” random interaction level is omitted from a CCREM. The simulation studies are followed by a discussion of implications for the application of multilevel models to household panel data.     

Consumer Response to Package Downsizing: Evidence from the Chicago Ice Cream Market

It is common among producers of consumer packaged goods to reduce the volume of product per package such that the new size replaces the old one. This tactic is commonly referred to as package downsizing. In this article, we investigate the extent to which consumers have different sensitivities to package price and package size in order to shed light on the managerial implications of package downsizing. To do so, we estimate a random utility model of demand to measure consumer response to price and package size using household scanner panel data on bulk ice cream purchases in Chicago. The estimation framework involves modeling household heterogeneity, addressing price endogeneity and accounting for unbalanced choice alternatives. Our main finding is that consumers are less responsive to package size than to price; the demand elasticity with respect to package size is approximately one-fourth the magnitude of the demand elasticity with respect to price. This result implies that marketing managers can use downsizing as a hidden price increase in order to pass through increases in production costs, that is, cost of raw materials, and maintain, or increase, their profits.     

Consumer choices under product option framing: Loss aversion principles or sensitivity to price differentials?

The effects of options framing can be theoretically explained by loss aversion principles as well as by potential alternative explanations (e.g., sensitivity to price differentials). This paper examines the interaction effects between option framing and two types of cognitive constraints (availability of cognitive resources and additional redundant product information) on consumer choices for adding or deleting optional product features. In the process, the research attempts to provide empirical support for one theoretical model (e.g., loss aversion principles) versus the other (e.g., sensitivity to price differentials). The results support the hypotheses that consumers choose a higher number of product options when starting from a fully loaded model than from a base model, and that this effect is magnified when consumers make choices under high cognitive constraints. In essence, the results empirically support the theoretical premise of the effects of option framing being driven by loss aversion principles than by diminished sensitivity to price differentials. © 2008 Wiley Periodicals, Inc.     

总供给冲击、总需求冲击与我国经济波动关系的实证研究

本文利用1994年1季度至2012年2季度产出和价格的季度数据,建立了基于长期约束的SVAR模型,用以分析总供给冲击和总需求冲击对我国经济波动的影响,考察经济增长和价格对总供给冲击和总需求冲击的动态响应。实证研究表明,总供给冲击和总需求冲击标准差均较大,而且总需求冲击波动性要大于总供给冲击的波动性,说明我国经济在样本数据期内存在波动性。脉冲响应分析发现,总供给冲击对于产出具有正向长期趋势,而总需求冲击对于产出具有正向短期影响;对于价格而言,总供给冲击对价格产生负向长期影响,而总需求冲击对价格产生正向长期影响。2011年以来我国经济增速持续放缓,主要在于供求冲击为负,供给负冲击更为显著。     

Microeconomic influences on operating leverage

The concept of operating leverage generally has been visualized in the context of linear break-even analysis. This paper evaluates the properties of two measures of the degree of operating leverage using a more general short-run microeconomic model of the firm. In this model, the degree of operating leverage is related positively to the price elasticity of demand for a firm's output, to its elasticity of supply for an input, and to its output elasticity. In addition, operating leverage measures are usually derived from models inconsistent with firm wealth maximizing behavior and are too simplistiic for complex models with stochastic demand, supply, and production functions.     

Situational price sensitivity: the role of consumption occasion, social context and income

Research on consumer reaction to price has been largely confined to examining consumers’ price information search, evaluation of price alternatives, and individual purchase behaviors without regard to situational influences. At the same time, consumption has often been dichotomized in terms of its functional-hedonic nature and has been examined with regard to social influence. Surprisingly, researchers have heretofore not examined the potential effect of the consumption occasion or social context on consumers’ price sensitivity. Further, research examining the effect of household resources on price sensitivity has produced mixed results. We argue that household income effects on price sensitivity are dependent upon the situation. This research addresses two key issues. First, we examine whether individuals are equally price-sensitive when purchasing products for functional (e.g., purchasing frozen vegetables or paper towels) versus hedonic (e.g., purchasing ice cream or cookies) consumption situations and whether social context (i.e., consuming the product alone or with others) influences price sensitivity. Second, we explore the interaction effects of household income and consumption context on price sensitivity. We examine these issues across a series of three studies, finding that consumers’ price sensitivity is in fact attenuated by both hedonic and social consumption situations and that income moderates these effects. Implications for researchers and practitioners are discussed.     

Hospital demand for physicians

This article develops a derived demand for physicians that is general enough to encompass physician control, simple profit maximization and hospital utility maximization models of the hospital. The analysis focuses on three special aspects of physician affiliations: the price of adding a physician to the staff is unobserved; the physician holds appointments at multiple hospitals, and physicians are not homogeneous. Using 1983 American Hospital Association data, a system of specialty-specific demand equations is estimated. The results are consistent with the model and suggest that physicians should be concerned about reduced access to hospitals, particularly as the stock of hospitals declines.     

基于供应链管理的供需双方经济批量模型实证分析

本文认为,供应链中的每个节点既是后一节点的供应商,又是前一节点的顾客,供需关系始终贯穿于整个供应链。传统经济批量模型中,订货商仅从自身利益出发追求成本最低的订货批量,这对供应商而言并非最优,供应商和订货商是矛盾对立的。在现代供应链管理中,供需双方应是一种战略合作伙伴关系,合作博弈的结果理应达到双赢。因此,为在竞争中取胜,应形成以顾客为中心的供应链管理,一方面,供应商应提高生产系统的柔性,对顾客需求作出快速反应;另一方面,供应商应与订货商建立战略联盟,追求优化、高效的供应链管理。本文建立的订货商的经济批量模型、订货商已作决策条件下的供应商最优生产批量模型以及供需双方合作博弈条件下的价格折扣模型可以优化供应链管理,促使供需双方达到双赢,从而实现供应链效益的最大化。     

A dynamic forecasting model for nursing manpower requirements in the medical service industry

Today there is an increasing demand for quality health care throughout the world. Such demand requires the medical service industry to equip with high technologies and high caliber professionals (e.g., doctors and nurses), to contain cost and improve quality of care. Since the medical service industry constantly suffers from the shortage of nursing manpower, forecasting the supply and demand of nursing manpower is an important issue. This study proposes a forecasting model for nursing manpower requirement using system dynamics. Data were collected from authorized institutions in Korea and were used as inputs of the model. The results show that the demand for nursing manpower exceeded the supply during the forecasting period (2006–2020), which requires both national and the medical service industry attention for sustained quality health care.     

Neighbourhood influences on organic buying

Past studies have explained organic buying as a function of sociodemographic or attitudinal consumer's traits and/or as a result of marketing influences. However, in view of mounting evidence of social effects on sustainable consumption, this paper aims to enrich our understanding of the determinants of organic demand by introducing neighbourhood effects in buying models; in particular, using scanner data from Nielsen household panelists of 2012–2013, this study tests the influence on demand of both structural variables (collapsed into a factor labelled “neighbourhood class”) and geographical location of a household, controlling for the influence of household characteristics and other marketing‐related influences (e.g., price). This paper concludes that structural class, rather than household class, positively influences organic milk purchasing. It also shows that relative class can also explain the likelihood of organic buying.     

城市化、城市集中度与人力资本积累――基于省级面板数据的实证研究

鉴于人力资本对经济增长的作用日显重要,人们希望知道哪些因素显著影响到人力资本,其中城市化水平、城市集中度等通过经济集聚强度而明显影响人力资本积累。城市化通过刺激人力资本供给与需求,创造良好的人力资本投资环境而促进人力资本积累,城市集中度提高带来的规模优势与外部不经济双重效应使其对人力资本积累具有两面性。依据2000—2015年我国30个省(直辖市、自治区)的面板数据,考虑省份之间的异质性及空间相依性,分别建立非线性面板模型和空间杜宾模型开展实证分析。结果表明：城市化水平与人力资本积累高度正相关,城市化对人力资本积累产生显著的促进效应;城市集中度与人力资本之间存在倒U型关系,不同地区城市集中度对人力资本的影响效应存在明显差异;城市化、城市集中度对人力资本的影响效应具有较强的稳健性。结论对于推动城市与区域经济高质量发展具有启示意义。     

A marginal-predictive approach to identifying household parameters

Estimation of household parameters in scanner panel data requires the introduction of prior information. Traditionally, prior information is incorporated by restricting parameters to be constant across households or by specifying a random coefficient distribution. An alternative solution is to incorporate stochastic prior information in a formal Bayesian approach. In standard Bayesian analysis, a prior distribution over the model parameters is specified and combined with the household likelihood to obtain the Bayes estimates. The construction of the prior distribution over model parameters may be difficult, especially when working with new models whose parameters are difficult to interpret. In this paper, we propose a solution which specifies prior information through the marginal distribution of the data, i.e., the outcomes. We evaluate this marginal-predictive approach, using both actual and simulated panel data, and show it to be highly accurate relative to other available alternatives.     

Empirical Analysis of Consumer Purchase Behavior: Interaction Between State Dependence and Sensitivity to Marketing-Mix Variables1

People are intent to make similar choices especially in consumer goods markets. To address both explanations of this persistence, i.e. state dependence and heterogeneity in preferences, we use random coefficient logit model based on scanner panel data on juice purchases. The product differentiation of the chosen category allows us to model three dimensions of state dependence on brand, size and flavor characteristics. We provide evidence that the persistence in brand choices is positively correlated with persistence in size and flavor choices, thus the consumer pattern is prone to be inertial or variety seeking in every product characteristics. Simultaneously we show that the more sensitive to price and promotional activities consumers are, the less inertial is their behavior.