Document Type

Thesis or dissertation

Date of this Version

May 2008

Comments

This paper is posted at ScholarlyCommons@Penn.

Abstract

For a business, it's important to know the repeat purchasing behavior of an existing customer. However, in a non-contractual setting, businesses cannot easily observe whether a customer is still active. The Beta-Geometric/Beta Binomial (BG/BB) model developed by Fader and Hardie in 2004 serves as a natural framework to model these types of behaviors. We further evaluate the BG/BB model by applying two different versions of the model to a dataset of 1975 customers over a period of 16 years to evaluate the predictive abilities of the BG/BB, and compares it with the Binary Logistic Regression model to determine whether the BG/BB model can give accurate forecasts over a long period of time.

Keywords

BG/BB, beta-geometric, beta-binomial, customer-base analysis, customer

Share

COinS
 

Date Posted: 10 October 2008

This document has been peer reviewed.

 

To view the content in your browser, please download Adobe Reader or, alternately,
you may Download the file to your hard drive.

NOTE: The latest versions of Adobe Reader do not support viewing PDF files within Firefox on Mac OS and if you are using a modern (Intel) Mac, there is no official plugin for viewing PDF files within the browser window.