Bayesian Estimation and Clustering of Latent Attitudinal Parameters Using Cross-Sectional Survey Data: Application to an Online Banking Survey

37 Pages Posted: 10 Feb 2015

See all articles by Sudhir Voleti

Sudhir Voleti

Indian School of Business (ISB), Hyderabad

Sundar G. Bharadwaj

University of Georgia--Terry School of Business; University of Georgia - C. Herman and Mary Virginia Terry College of Business

Date Written: February 8, 2015

Abstract

Firms routinely collect cross-sectional survey data on attitudinal constructs such as satisfaction, brand awareness, behavioral intentions etc. from current and prospective customers. The single observation per individual in such survey data offers limited scope for estimation and inference of heterogeneous response parameters, and consequently, for downstream analyses that presuppose a heterogeneous response. We present a Bayesian treatment to this problem. We estimate these individual-specific latent attitudinal parameters, segment the respondents on the basis of these parameters, and finally, empirically validate our clustering solutions. Our approach considers both finite and infinite mixtures of component densities and enables exact finite sample inference on both individual level parameters and cluster level parameters. We examine the performance of the latent class, the mixture of normals and the semiparametric Bayesian estimators under varying conditions of latent data structure, cluster separation and individual-level idiosyncratic variance.

Keywords: Latent Variable Segmentation, Bayesian Mixture Model, Dirichlet Process prior, Crosssectional data, survey, e-banking

Suggested Citation

Voleti, Sudhir and Bharadwaj, Sundar G., Bayesian Estimation and Clustering of Latent Attitudinal Parameters Using Cross-Sectional Survey Data: Application to an Online Banking Survey (February 8, 2015). Indian School of Business Research Paper Series, Available at SSRN: https://ssrn.com/abstract=2562187 or http://dx.doi.org/10.2139/ssrn.2562187

Sudhir Voleti (Contact Author)

Indian School of Business (ISB), Hyderabad ( email )

Hyderabad, Gachibowli 500 019
India

Sundar G. Bharadwaj

University of Georgia--Terry School of Business ( email )

105 Brooks Hall
Athens, GA 30602
United States

University of Georgia - C. Herman and Mary Virginia Terry College of Business ( email )

Brooks Hall
Athens, GA 30602-6254
United States

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