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Modelling the purchase propensity: analysis of a revolving store card

Author

Listed:
  • G Andreeva

    (Credit Research Centre, University of Edinburgh)

  • J Ansell

    (Credit Research Centre, University of Edinburgh)

  • J N Crook

    (Credit Research Centre, University of Edinburgh)

Abstract

We investigate the incremental roles of information that becomes available only after a revolving loan has been granted in explaining and predicting the time taken until the borrower makes a second purchase. Using data relating to a store card, granted around the time of first purchase and used in Belgium, we find that characteristics of a first purchase and remaining credit available for use enhance the explanatory and predictive power of application characteristics. The relationship differs between good and poor payers.

Suggested Citation

  • G Andreeva & J Ansell & J N Crook, 2005. "Modelling the purchase propensity: analysis of a revolving store card," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(9), pages 1041-1050, September.
    • Handle: RePEc:pal:jorsoc:v:56:y:2005:i:9:d:10.1057_palgrave.jors.2601933
    DOI: 10.1057/palgrave.jors.2601933
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    References listed on IDEAS

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    1. D J Hand & M G Kelly, 2001. "Lookahead scorecards for new fixed term credit products," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 52(9), pages 989-996, September.
    2. J Banasik & J N Crook & L C Thomas, 1999. "Not if but when will borrowers default," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 50(12), pages 1185-1190, December.
    3. M Stepanova & L C Thomas, 2001. "PHAB scores: proportional hazards analysis behavioural scores," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 52(9), pages 1007-1016, September.
    4. Maria Stepanova & Lyn Thomas, 2002. "Survival Analysis Methods for Personal Loan Data," Operations Research, INFORMS, vol. 50(2), pages 277-289, April.
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    Cited by:

    1. P Ma & J Crook & J Ansell, 2010. "Modelling take-up and profitability," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(3), pages 430-442, March.
    2. Sanchez-Barrios, Luis Javier & Andreeva, Galina & Ansell, Jake, 2016. "“Time-to-profit scorecards for revolving credit”," European Journal of Operational Research, Elsevier, vol. 249(2), pages 397-406.
    3. Jonathan Crook & Tony Bellotti, 2010. "Time varying and dynamic models for default risk in consumer loans," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 173(2), pages 283-305, April.
    4. Luisa ANDERLONI & Daniela VANDONE, 2008. "Households over-indebtedness in the economic literature," Departmental Working Papers 2008-46, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    5. Andreeva, Galina & Ansell, Jake & Crook, Jonathan, 2007. "Modelling profitability using survival combination scores," European Journal of Operational Research, Elsevier, vol. 183(3), pages 1537-1549, December.
    6. L Quirini & L Vannucci, 2010. "A new index of creditworthiness for retail credit products," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(3), pages 455-461, March.

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