Incorporating frequency estimation on discrete choice
(A2019-8654)

AUTHORS

Aku-Ville Lehtimäki, Aalto University School of Business; Outi Somervuori, Aalto University School of Business & DT Helsinki Oy

KEYWORDS

purchase frequency; demand estimation; exponential distribution

ABSTRACT

Discrete choice models are often used to estimate preference shares. However, less if not all attention is paid to the purchase frequency. This information is equally essential for demand estimates. In this paper we present a method with theoretical background how to survey purchase frequency and model the purchase frequency behavior, which is followed by an example. Incorporating frequency estimation into discrete choice research will allow researchers to make better predictions of potential demand.