Using Selective Sampling for Binary Choice Models to Reduce Survey Costs

31 Pages Posted: 20 Feb 2003

See all articles by Bas Donkers

Bas Donkers

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management (ERIM); Tinbergen Institute

Philip Hans Franses

Erasmus University Rotterdam (EUR) - Department of Econometrics

Peter C. Verhoef

University of Groningen - Department of Marketing & Marketing Research

Date Written: January 2001 1,

Abstract

Marketing problems sometimes concern the analysis of dichotomous variables, like for example ``buy'' and ``not buy'' and ``respond'' and ``not respond''. It can happen that one outcome strongly outnumbers the other, for example when many households do not respond (to a direct mailing, for example). Standard econometric methods would imply the collection of many data to obtain precise estimates and this can be rather costly. To cut back costs, we propose to implement a non-random sampling scheme and to correct for the subsequent sample selection bias in the econometric model. In this paper we put forward the relevant method, which does not lead to a loss in precision. Our illustration suggests an opportunity to collect 60\% less data points.

Keywords: Outcome-dependent sampling, sample size, survey design, binary outcomes, logit model

JEL Classification: M, M31, C44, C19

Suggested Citation

Donkers, Bas and Franses, Philip Hans and Verhoef, Peter C., Using Selective Sampling for Binary Choice Models to Reduce Survey Costs (January 2001 1,). ERIM Report Series Reference No. ERS-2001-67-MKT. Available at SSRN: https://ssrn.com/abstract=370925

Bas Donkers (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
Rotterdam, NL 3000 DR
Netherlands
+31 10 408 2411 (Phone)
+31 10 408 9169 (Fax)

HOME PAGE: http://people.few.eur.nl/donkers/

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 2411 (Phone)
+31 10 408 9169 (Fax)

HOME PAGE: http://people.few.eur.nl/donkers/

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Philip Hans Franses

Erasmus University Rotterdam (EUR) - Department of Econometrics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 1278 (Phone)
+31 10 408 9162 (Fax)

Peter C. Verhoef

University of Groningen - Department of Marketing & Marketing Research ( email )

Netherlands

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