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A Unified Approach to Identifying, Estimating and Testing Demand Structures with Aggregate Scanner Data

Author

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  • Greg M. Allenby

    (The Ohio State University)

Abstract

A one-to-one map between a specific demand structure and a restricted cross-elasticity matrix is developed and tested using a random utility model. The resulting demand structure can be used to evaluate a firm's ability to differentiate its products, and can help determine if demand is characterized by factors that are easy to change. Similar brands are assumed to share common attributes that are stochastically evaluated by the consumer, resulting in a random utility model with correlated errors. The map results in more precise cross-elasticity estimates and can be used to both identify and test possible structures.

Suggested Citation

  • Greg M. Allenby, 1989. "A Unified Approach to Identifying, Estimating and Testing Demand Structures with Aggregate Scanner Data," Marketing Science, INFORMS, vol. 8(3), pages 265-280.
    • Handle: RePEc:inm:ormksc:v:8:y:1989:i:3:p:265-280
    DOI: 10.1287/mksc.8.3.265
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    Citations

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    Cited by:

    1. Chintagunta, Pradeep K., 1999. "Measuring the effects of new brand introduction on inter-brand strategic interaction," European Journal of Operational Research, Elsevier, vol. 118(2), pages 315-331, October.
    2. Elrod, Terry & Keane, Michael, 1995. "A Factor-Analytic Probit Model for Representing the Market Structure in Panel Data," MPRA Paper 52434, University Library of Munich, Germany.
    3. Raj Sethuraman & V. Srinivasan & Doyle Kim, 1999. "Asymmetric and Neighborhood Cross-Price Effects: Some Empirical Generalizations," Marketing Science, INFORMS, vol. 18(1), pages 23-41.
    4. Adam N. Smith & Jim E. Griffin, 2023. "Shrinkage priors for high-dimensional demand estimation," Quantitative Marketing and Economics (QME), Springer, vol. 21(1), pages 95-146, March.
    5. K. Sudhir, 2001. "Structural Analysis of Manufacturer Pricing in the Presence of a Strategic Retailer," Marketing Science, INFORMS, vol. 20(3), pages 244-264, October.
    6. repec:dgr:rugsom:96b34 is not listed on IDEAS
    7. Wedel, Michel & DeSarbo, Wayne S., 1996. "Semiparametric estimation of (constrained) ultrametric trees," Research Report 96B34, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    8. Cohen, Michael, 2010. "A Structured Covariance Probit Demand Model," Research Reports 149970, University of Connecticut, Food Marketing Policy Center.
    9. Greg M. Allenby & Thomas S. Shively & Sha Yang & Mark J. Garratt, 2004. "A Choice Model for Packaged Goods: Dealing with Discrete Quantities and Quantity Discounts," Marketing Science, INFORMS, vol. 23(1), pages 95-108, June.
    10. Ó González-Benito & M P Martínez-Ruiz & A Molla-Descals, 2009. "Spatial mapping of price competition using logit-type market share models and store-level scanner-data," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 60(1), pages 52-62, January.
    11. Karsten Hansen & Vishal Singh, 2009. "Market Structure Across Retail Formats," Marketing Science, INFORMS, vol. 28(4), pages 656-673, 07-08.
    12. Francisco F. R. Ramos, 1996. "A Time Series Analysis to Asymmetric Marketing Competition Within a Market Structure," Microeconomics 9601001, University Library of Munich, Germany.
    13. Goddard, Ellen W. & Shank, Benjamin & Panter, Chris & Nilsson, Tomas K.H. & Cash, Sean B., 2007. "Canadian Chicken Industry: Consumer Preferences, Industry Structure and Producer Benefits from Investment in Research and Advertising," Project Report Series 52088, University of Alberta, Department of Resource Economics and Environmental Sociology.
    14. A. Gürhan Kök & Yi Xu, 2011. "Optimal and Competitive Assortments with Endogenous Pricing Under Hierarchical Consumer Choice Models," Management Science, INFORMS, vol. 57(9), pages 1546-1563, February.
    15. Krishnamurthi, Lakshman & Raj, S. P. & Sivakumar, K., 1995. "Unique inter-brand effects of price on brand choice," Journal of Business Research, Elsevier, vol. 34(1), pages 47-56, September.
    16. C Lin & Y-T Lin, 2008. "Robust analysis on promotion duration for two competitive brands," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 59(4), pages 548-555, April.
    17. Alan L. Montgomery & Eric T. Bradlow, 1999. "Why Analyst Overconfidence About the Functional Form of Demand Models Can Lead to Overpricing," Marketing Science, INFORMS, vol. 18(4), pages 569-583.

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