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Are consumers
forward-looking?
-Using MCMC Bayesian Inference-
GRADUATE SCHOOL OF ECONOMICS
M1 R. K.
Estimation Results
 Post-mean of alphas are:
alpha1> alpha2> alpha3> alpha4> alpha5
⇒reflecting brand share
 beta is negative and statistically significant
⇒consumers are unlikely to buy higher price
mineral water
 delta is positive (around 55.3%) and
statistically significant
⇒consumers are forward-looking!
parameter post-mean post-s.d. lower-95% upper-95%
alpha1 0.035 0.145 -0.250 0.320
alpha2 -0.834 0.170 -1.167 -0.502
alpha3 -2.264 0.191 -2.638 -1.889
alpha4 -3.189 0.259 -3.696 -2.682
alpha5 -3.812 0.263 -4.328 -3.296
alpha6 -2.753 0.241 -3.225 -2.281
sig1 1.204 0.064 1.079 1.330
sig2 1.591 0.102 1.391 1.792
sig3 1.728 0.135 1.463 1.992
sig4 2.172 0.188 1.803 2.541
sig5 1.975 0.202 1.578 2.371
sig6 2.165 0.174 1.825 2.506
beta -0.032 0.003 -0.038 -0.026
delta 0.553 0.021 0.512 0.594








 







,;,|)(max),;( iiitijtijtij
t
t
iit pEV
i
discount
factor
price
coefficient
brand
loyalty
beta
Iteration
Burn-in period
(not used for estimation)

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[Test] Are consumers forward looking

  • 1. Are consumers forward-looking? -Using MCMC Bayesian Inference- GRADUATE SCHOOL OF ECONOMICS M1 R. K.
  • 2. Estimation Results  Post-mean of alphas are: alpha1> alpha2> alpha3> alpha4> alpha5 ⇒reflecting brand share  beta is negative and statistically significant ⇒consumers are unlikely to buy higher price mineral water  delta is positive (around 55.3%) and statistically significant ⇒consumers are forward-looking! parameter post-mean post-s.d. lower-95% upper-95% alpha1 0.035 0.145 -0.250 0.320 alpha2 -0.834 0.170 -1.167 -0.502 alpha3 -2.264 0.191 -2.638 -1.889 alpha4 -3.189 0.259 -3.696 -2.682 alpha5 -3.812 0.263 -4.328 -3.296 alpha6 -2.753 0.241 -3.225 -2.281 sig1 1.204 0.064 1.079 1.330 sig2 1.591 0.102 1.391 1.792 sig3 1.728 0.135 1.463 1.992 sig4 2.172 0.188 1.803 2.541 sig5 1.975 0.202 1.578 2.371 sig6 2.165 0.174 1.825 2.506 beta -0.032 0.003 -0.038 -0.026 delta 0.553 0.021 0.512 0.594                  ,;,|)(max),;( iiitijtijtij t t iit pEV i discount factor price coefficient brand loyalty