Abstract

http://ssrn.com/abstract=2028006
 


 



Short Run Needs and Long Term Goals: A Dynamic Model of Thirst Management


Yale Cowles Submitter


Yale University - Cowles Foundation

Guofang Huang


Yale School of Management

Ahmed Khwaja


Yale School of Management

K. Sudhir


Yale School of Management; Yale University-Department of Economics; Yale University - Cowles Foundation

March 23, 2012

Cowles Foundation Discussion Paper No. 1856

Abstract:     
Beverage consumption occurs many times a day in response to a variety of needs that change throughout the day. In making their choices, consumers self-regulate their consumption by managing short run needs (e.g., hydration and mood pickup) with long-term goals (e.g., health). Using unique intra-day beverage consumption, activity and psychological needs data, we develop and estimate a model of high frequency consumption choices that accounts for both intra-day changes in short run needs and individual level unobserved heterogeneity in the degree of self-regulation. A novel feature of the model is that it allows for dynamics of consumption and stockpiling at the level of product attributes. The model is used to evaluate introduction of new products in the beverage category and gain insight into the linkage between self-regulation and excess consumption. Broadly, the modeling framework of balancing short run needs with long-term goals has wide ranging applications in choices where long term effects are gradual (e.g., nutrition, exercise, smoking and preventive health care).

Number of Pages in PDF File: 49

Keywords: Dynamic discrete choice, EM algorithm, Self-regulation, Stockpiling, Health care, Needs, Goals, Obesity, Beverages, New product introductions

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Date posted: March 26, 2012  

Suggested Citation

Submitter, Yale Cowles and Huang, Guofang and Khwaja, Ahmed and Sudhir, K., Short Run Needs and Long Term Goals: A Dynamic Model of Thirst Management (March 23, 2012). Cowles Foundation Discussion Paper No. 1856. Available at SSRN: http://ssrn.com/abstract=2028006 or http://dx.doi.org/10.2139/ssrn.2028006

Contact Information

Yale Cowles Submitter
Yale University - Cowles Foundation ( email )
Box 208281
New Haven, CT 06520-8281
United States
203-432-3709 (Phone)
Guofang Huang
Yale School of Management ( email )
New Haven, CT 06520
United States
Ahmed Khwaja (Contact Author)
Yale School of Management ( email )
135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

K. Sudhir
Yale School of Management ( email )
135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-432-3289 (Phone)
203-432-3003 (Fax)

Yale University-Department of Economics ( email )
28 Hillhouse Ave
New Haven, CT 06520-8268
United States
Yale University - Cowles Foundation ( email )
Box 208281
New Haven, CT 06520-8281
United States

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