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Dynamics of Consumer Preference in Binary Probit Model

이산프로빗모형에서 소비자선호의 동태성

  • Received : 2010.04.23
  • Accepted : 2010.05.12
  • Published : 2010.05.28

Abstract

Consumers differ in both horizontally and vertically. Market segmentation aims to divide horizontally different (or heterogeneous) consumers into more similar (or homogeneous) small segments. A specific consumer, however, may differ in vertically. He (or she) may belong to a different market segment from another one where he (or she) belonged to before. In consumer panel data, the vertical difference can be observed by his (or her) choice among brand alternatives are changing over time. The consumer's vertical difference has been defined as 'dynamics'. In this research, we have developed a binary probit model with random-walk coefficients to capture the consumer's dynamics. With an application to a consumer panel data, we have examined how have the random-walk coefficients changed over time.

Keywords

Dynamics;Market Segmentation;Binary Probit Model;State-Space Model;Time Varying Coefficient

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