Hierarchical Bayes Models: A Practitioners Guide

Abstract

Hierarchical Bayes models free researchers from computational constraints and allow for the development of more realistic models of buyer behavior and decision making. Moreover, this freedom enables exploration of marketing problems that have proven elusive over the years, such as models for advertising ROI, sales force effectiveness, and similarly complex problems that often involve simultaneity. The promise of Bayesian statistical methods lies in the ability to deal with these complex problems, but the very complexity of the problems creates a significant challenge to both researchers and practitioners. We illustrate the promise of HB models and provide an introduction to their computation.

Keywords: Hiearchical models, bayes, survey research, conjoint

JEL Classification: M3, C0