The Stochastic Specification of Attraction Models

Estimation of attraction models in marketing typically involves the use of the logcentering transformation.. The resultant estimating equations are then linear in the parameters. The log-centering transformation also appears in the statistical analysis of compositional data (CODA). CODA techniques are applied to data on "shares" in a wide variety of disciplines. This paper uses CODA techniques to rationalize the stochastic specification of attraction models. It further shows that another transformation from CODA, the log-ratio transform, can yield simpler estimating equations. The results are illustrated using an empirical example.


Issue Date:
Sep 01 1996
Publication Type:
Working or Discussion Paper
Language:
English
Total Pages:
19
JEL Codes:
M31; C39; C13
Series Statement:
Working Paper 16/96




 Record created 2018-02-06, last modified 2018-02-07

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