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A micro-analytic threshold model for the timing of first purchases of durable goods

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  • Sudeep Haldar
  • Vithala Rao

Abstract

A micro-analytic threshold model to describe the timing of household purchases of consumer durable goods is developed and tested. The model incorporates unobserved heterogeneity via a generalized gamma distribution and accounts for time varying covariates. Further, we employ estimation methods applicable or purchase data observed at periodic intervals of time. The model outperforms other competing models for predicting the timing of purchase of durable goods in terms of fit and predictive ability. In particular, this model outperforms the logit model and the diffusion model. The generalized gamma timing model predicts well the time to purchase the durable good; we show how it can be employed for micro-segmentation of households. Several research directions and applications are described.

Suggested Citation

  • Sudeep Haldar & Vithala Rao, 1998. "A micro-analytic threshold model for the timing of first purchases of durable goods," Applied Economics, Taylor & Francis Journals, vol. 30(7), pages 959-974.
    • Handle: RePEc:taf:applec:v:30:y:1998:i:7:p:959-974
    DOI: 10.1080/000368498325390
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    Cited by:

    1. Inseong Song & Pradeep Chintagunta, 2003. "A Micromodel of New Product Adoption with Heterogeneous and Forward-Looking Consumers: Application to the Digital Camera Category," Quantitative Marketing and Economics (QME), Springer, vol. 1(4), pages 371-407, December.
    2. Kim, Hwang & Rao, Vithala R., 2023. "A comparison of online recommendation methods: Simultaneous versus sequential approaches," Journal of Retailing, Elsevier, vol. 99(2), pages 210-227.
    3. A. Prinzie & D. Van Den Poel, 2007. "Predicting home-appliance acquisition sequences: Markov/Markov for Discrimination and survival analysis for modeling sequential information in NPTB models," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 07/442, Ghent University, Faculty of Economics and Business Administration.
    4. Christophe Van den Bulte, 2000. "New Product Diffusion Acceleration: Measurement and Analysis," Marketing Science, INFORMS, vol. 19(4), pages 366-380, June.

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