The Stochastic Specification of Attraction Models

Tim R. L. Fry and Eileen M. Sexton

No 267918, Department of Econometrics and Business Statistics Working Papers from Monash University, Department of Econometrics and Business Statistics

Abstract: 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.

Keywords: Research; Methods/Statistical; Methods (search for similar items in EconPapers)
Pages: 19
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Persistent link: https://EconPapers.repec.org/RePEc:ags:monebs:267918

DOI: 10.22004/ag.econ.267918

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