IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Additive models with random scaling factors: applications to modeling price response functions

Listed author(s):
  • Peter Wechselberger


  • Stefan Lang


  • Winfried J. Steiner


Registered author(s):

    We discuss inference for additive models with random scaling factors. The additive effects are of the form (1+g)f(z) where f is a nonlinear function of the continuous covariate z modeled by P(enalized)-splines and 1+g is a random scaling factor. Additionally, monotonicity constraints on the nonlinear functions are possible. Our work is motivated by the situation of a retailer analyzing the impact of price changes on a brand's sales in its orange juice product category. Relating sales to a brand's own price as well as to the prices of competing brands in the category, we estimate own- and cross-item price response functions flexibly to represent nonlinearities and irregular pricing effects in sales response. Monotonicity constraints are imposed so that a brand's own price is inversely related and the prices of competing brands are directly related to the number of items sold, as suggested by economic theory. Unobserved store-specific heterogeneity is accounted for by allowing the price response curves to vary between different stores.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by Faculty of Economics and Statistics, University of Innsbruck in its series Working Papers with number 2007-27.

    in new window

    Length: 20
    Date of creation: Oct 2007
    Handle: RePEc:inn:wpaper:2007-27
    Contact details of provider: Postal:
    Universit├Ątsstra├če 15, A - 6020 Innsbruck

    Phone: 0512/507-7151
    Fax: 0512/507-2788
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:inn:wpaper:2007-27. 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: (Janette Walde)

    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 references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link 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 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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.