|Friday, February 21|
|CS10 Not Your Usual Assumptions||
Fri, Feb 21, 1:30 PM - 3:00 PM
Estimating Price Elasticities from Censored Data: Frequentist & Bayesian Approaches (302706)Christian Macaro, sas institute
*Kenneth P. Sanford, SAS Institute
Keywords: Bayesian Econometrics, Market Research, Revenue Management
The number of rooms rented by a hotel, spending by “loyalty card” customers, automobile purchases by households—these are just a few examples of variables that can be described best as “limited” variables. When limited (censored or truncated) variables are chosen as dependent variables, certain necessary assumptions of linear regression are violated. This paper discusses the use of econometric and statistical tools to analyze data in which the dependent variable is limited. It presents several examples that use the classical approach and the Bayesian approaches, emphasizing the advantages and disadvantages each approach provides.