Not-so-Classical Measurement Errors: A Validation Study of Homescan

31 Pages Posted: 27 Oct 2008 Last revised: 28 Oct 2008

See all articles by Liran Einav

Liran Einav

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Ephraim Leibtag

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS)

Aviv Nevo

Northwestern University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: October 2008

Abstract

We report results from a validation study of Nielsen Homescan data. We use data from a large grocery chain to match thousands of individual transactions that were recorded by both the retailer (at the store) and the Nielsen Homescan panelist (at home). First, we report how often shopping trips are not reported, and how often trip information, product information, price, and quantity are reported with error. We focus on recording errors in prices, which are more prevalent, and show that they can be classified to two categories, one due to standard recording errors, while the other due to the way Nielsen constructs the price data. We then show how the validation data can be used to correct the impact of recording errors on estimates obtained from Nielsen Homescan data. We use a simple application to illustrate the impact of recording errors as well as the ability to correct for these errors. The application suggests that while recording errors are clearly present, and potentially impact results, corrections, like the one we employ, can be adopted by users of Homescan data to investigate the robustness of their results.

Suggested Citation

Einav, Liran and Leibtag, Ephraim and Nevo, Aviv, Not-so-Classical Measurement Errors: A Validation Study of Homescan (October 2008). NBER Working Paper No. w14436. Available at SSRN: https://ssrn.com/abstract=1289670

Liran Einav (Contact Author)

Stanford University - Department of Economics ( email )

Landau Economics Building
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Stanford, CA 94305-6072
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650-723-3704 (Phone)
928-223-4973 (Fax)

National Bureau of Economic Research (NBER)

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Ephraim Leibtag

U.S. Department of Agriculture (USDA) - Economic Research Service (ERS) ( email )

355 E Street, SW
Washington, DC 20024-3221
United States
202-694-5349 (Phone)

Aviv Nevo

Northwestern University - Department of Economics ( email )

2003 Sheridan Road
Evanston, IL 60208
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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