The Dirichlet Distribution as a Model of Brand Choice: Further Testing

31 Pages Posted: 24 Feb 2016

Date Written: October 1981

Abstract

This paper provides further evidence on the appropriateness of the Dirichlet model for modeling brand choice. A simple estimation procedure is used and the model is tested on consumer panel data for three product categories (margarine, regular coffee and instant coffee). The results show that a) the model tends to underpredict the proportion of light users of a brand, b) compared to the Hendry model and to the Switching law, it provides an acceptable fit to aggregate switching data over consecutive choice occasions, and c) it gives an adequate description of the correlation between relative frequencies of choice across consumers. Consistently with previous studies, the Hendry model tends to overestimate repeat purchase whereas the switching law, like the Dirichlet model, does not indicate any systematic deviation in its predictions of Switching behavior.

Suggested Citation

Bemmaor, Albert C., The Dirichlet Distribution as a Model of Brand Choice: Further Testing (October 1981). Available at SSRN: https://ssrn.com/abstract=2736896 or http://dx.doi.org/10.2139/ssrn.2736896

Albert C. Bemmaor (Contact Author)

ESSEC Business School ( email )

3 Avenue Bernard Hirsch
CS 50105 CERGY
CERGY, CERGY PONTOISE CEDEX 95021
France

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