IDEAS home Printed from https://ideas.repec.org/a/ags/jlaare/30884.html
   My bibliography  Save this article

The Decision Of When To Buy A Frequently Purchased Good: A Multi-Period Probit Model

Author

Listed:
  • Gould, Brian W.
  • Dong, Diansheng

Abstract

Increased availability of scanner-based panel data has enabled researchers to better understand nondurable commodity purchase dynamics. In this study, we focus on one component of the purchase process--when to buy. The relationship between the discrete purchase decision and a set of household and purchase characteristics is quantified using a simulated maximum-likelihood procedure. Given the longitudinal nature of our data, unobserved heterogeneity is addressed by adopting an auto-correlated error structure. Our empirical application is household purchases of cheese. We find evidence of significant persistent unobservable household heterogeneity, which is not eliminated by the inclusion of lagged exogenous variables.

Suggested Citation

  • Gould, Brian W. & Dong, Diansheng, 2000. "The Decision Of When To Buy A Frequently Purchased Good: A Multi-Period Probit Model," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(02), December.
    • Handle: RePEc:ags:jlaare:30884
    as

    Download full text from publisher

    File URL: http://purl.umn.edu/30884
    Download Restriction: no

    References listed on IDEAS

    as
    1. Borsch-Supan, Axel & Hajivassiliou, Vassilis A., 1993. "Smooth unbiased multivariate probability simulators for maximum likelihood estimation of limited dependent variable models," Journal of Econometrics, Elsevier, vol. 58(3), pages 347-368, August.
    2. Axel Borsch-Supan & Vassilis Hajivassiliou & Laurence J. Kotlikoff, 1992. "Health, Children, and Elderly Living Arrangements: A Multiperiod-Multinomial Probit Model with Unobserved Heterogeneity and Autocorrelated Errors," NBER Chapters,in: Topics in the Economics of Aging, pages 79-108 National Bureau of Economic Research, Inc.
    3. Hajivassiliou, Vassilis A. & Ruud, Paul A., 1986. "Classical estimation methods for LDV models using simulation," Handbook of Econometrics,in: R. F. Engle & D. McFadden (ed.), Handbook of Econometrics, edition 1, volume 4, chapter 40, pages 2383-2441 Elsevier.
    4. Erdem, Tulin & Keane, Michael P. & Sun, Baohong, 1998. "Missing price and coupon availability data in scanner panels: Correcting for the self-selection bias in choice model parameters," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 177-196, November.
    5. Hajivassiliou, V A, 1994. "A Simulation Estimation Analysis of the External Debt Crises of Developing Countries," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 9(2), pages 109-131, April-Jun.
    6. Keane, Michael P, 1994. "A Computationally Practical Simulation Estimator for Panel Data," Econometrica, Econometric Society, vol. 62(1), pages 95-116, January.
    7. João L. Assunção & Robert J. Meyer, 1993. "The Rational Effect of Price Promotions on Sales and Consumption," Management Science, INFORMS, vol. 39(5), pages 517-535, May.
    8. Gould, Brian W. & Lin, Huei Chin, 1994. "Nutrition Information And Household Dietary Fat Intake," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 19(02), December.
    9. Tülin Erdem & Michael P. Keane, 1996. "Decision-Making Under Uncertainty: Capturing Dynamic Brand Choice Processes in Turbulent Consumer Goods Markets," Marketing Science, INFORMS, vol. 15(1), pages 1-20.
    10. Geweke, John & Keane, Michael P & Runkle, David, 1994. "Alternative Computational Approaches to Inference in the Multinomial Probit Model," The Review of Economics and Statistics, MIT Press, vol. 76(4), pages 609-632, November.
    11. Vicki A. McCracken & Jon A. Brandt, 1987. "Household Consumption of Food-Away-From-Home: Total Expenditure and by Type of Food Facility," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(2), pages 274-284.
    12. Steven T. Yen & Andrew M. Jones, 1997. "Household Consumption of Cheese: An Inverse Hyperbolic Sine Double-Hurdle Model with Dependent Errors," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 246-251.
    13. Vassilis A. Hajivassiliou & Daniel L. McFadden, 1998. "The Method of Simulated Scores for the Estimation of LDV Models," Econometrica, Econometric Society, vol. 66(4), pages 863-896, July.
    14. Geweke, John F. & Keane, Michael P. & Runkle, David E., 1997. "Statistical inference in the multinomial multiperiod probit model," Journal of Econometrics, Elsevier, vol. 80(1), pages 125-165, September.
    15. Hajivassiliou, Vassilis & McFadden, Daniel & Ruud, Paul, 1996. "Simulation of multivariate normal rectangle probabilities and their derivatives theoretical and computational results," Journal of Econometrics, Elsevier, vol. 72(1-2), pages 85-134.
    16. McCulloch, Robert & Rossi, Peter E., 1994. "An exact likelihood analysis of the multinomial probit model," Journal of Econometrics, Elsevier, vol. 64(1-2), pages 207-240.
    17. Diansheng Dong & J.S. Shonkwiler & Oral Capps, 1998. "Estimation of Demand Functions Using Cross-Sectional Household Data: The Problem Revisited," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(3), pages 466-473.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gardebroek, Cornelis & Oude Lansink, Alfons G.J.M., 2008. "Dynamic Microeconometric Approaches To Analysing Agricultural Policy," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6592, European Association of Agricultural Economists.
    2. Munroe, Darla K. & Southworth, Jane & Tucker, Catherine M., 2002. "The dynamics of land-cover change in western Honduras: exploring spatial and temporal complexity," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 27(3), November.
    3. Schmit, Todd M. & Dong, Diansheng & Chung, Chanjin & Kaiser, Harry M. & Gould, Brian W., 2002. "Identifying The Effects Of Generic Advertising On The Household Demand For Fluid Milk And Cheese: A Two-Step Panel Data Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(01), July.
    4. Munroe, Darla K. & Southworth, Jane & Tucker, Catherine M., 2001. "The Dynamics Of Land-Cover Change In Western Honduras: Spatial Autocorrelation And Temporal Variation," 2001 Annual meeting, August 5-8, Chicago, IL 20759, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Dong, Diansheng & Chung, Chanjin & Kaiser, Harry M., 2001. "Panel Data Double-Hurdle Model: An Application To Dairy Advertising," 2001 Annual meeting, August 5-8, Chicago, IL 20502, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Abdulfatah Sheikhbihi Adam & Sinne Smed, 2012. "The effects of different types of taxes on soft-drink consumption," IFRO Working Paper 2012/9, University of Copenhagen, Department of Food and Resource Economics, revised Nov 2012.
    7. Munroe, Darla K. & Southworth, Jane & Tucker, Catherine M., 2002. "The dynamics of land-cover change in western Honduras: exploring spatial and temporal complexity," Agricultural Economics, Blackwell, vol. 27(3), pages 355-369, November.
    8. Huang, Min-Hsin & Hahn, David E. & Jones, Eugene, 2004. "Determinants Of Price Elasticities For Store Brands And National Brands Of Cheese," 2004 Annual meeting, August 1-4, Denver, CO 20235, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Astrid Jonas & Jutta Roosen, 2008. "Demand for milk labels in Germany: organic milk, conventional brands, and retail labels," Agribusiness, John Wiley & Sons, Ltd., vol. 24(2), pages 192-206.

    More about this item

    Keywords

    Agribusiness;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jlaare:30884. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/waeaaea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.