Modeling category-level purchase timing with brand-level marketing variables
Journal of Applied Econometrics , Volume 24 - Issue 3 p. 469- 489
Purchase timing of households is usually modeled at the category level. However, many potential explanatory variables are observed at the brand level. To explain interpurchase times one has to either construct category-level measures of marketing efforts, or integrate the model with a model for brand choice. In this paper we pursue the latter where we use latent brand preferences to capture the relevance of the marketing mix of an individual brand. We compare our new model with several standard approaches on in-sample and out-of-sample fit and on the interpretation of the estimates of key parameters.