Chapter 15 Modeling Application

15.1 Transformation

15.1.1 Log-transformation

(Manchanda, Rossi, and Chintagunta 2004; Wies et al. 2019) used 1 in place of 0 for log-transformation. And also use 0.5 and 0.0001 for sensitivity analysis.

To control for firm size effects, (Wies et al. 2019) scale advertising investments by the firm’s total assets in the given year

15.2 Endogeneity

15.2.1 Control Function

In the context of consumer choice model (Petrin and Train 2010)

References

Manchanda, Puneet, Peter E. Rossi, and Pradeep K. Chintagunta. 2004. “Response Modeling with Nonrandom Marketing-Mix Variables.” Journal of Marketing Research 41 (4): 467–78. https://doi.org/10.1509/jmkr.41.4.467.47005.

Petrin, Amil, and Kenneth Train. 2010. “A Control Function Approach to Endogeneity in Consumer Choice Models.” Journal of Marketing Research 47 (1): 3–13. https://doi.org/10.1509/jmkr.47.1.3.

Wies, Simone, Arvid Oskar Ivar Hoffmann, Jaakko Aspara, and Joost M. E. Pennings. 2019. “Can Advertising Investments Counter the Negative Impact of Shareholder Complaints on Firm Value?” Journal of Marketing 83 (4): 58–80. https://doi.org/10.1177/0022242919841584.