Market share analysis using semi-parametric attraction models

Attraction models used to analyze the effects of marketing instruments on market share hitherto assume certain strict functional forms. We introduce semi-parametric models whose parametric components are equivalent to an exponential or multiplicative function. The nonparametric part is estimated on the basis of penalized generalized least squares taking into account smoothness of nonlinear functions. In the empirical study presented market share models with semi-parametric additive brand attractions attain better fits both according to an information criterion that penalizes a model for degrees of freedom (df) consumed and according to error measures determined by bootstrapping. (C) 2002 Elsevier Science B.V. All rights reserved.