The Handbook of Marketing Research: Uses, Misuses, and Future Advances comprehensively explores the approaches for delivering market insights for fact-based decision making in a market-oriented firm. Divided into four parts, the Handbook addresses (1) the different nuances of delivering insights; (2) quantitative, qualitative, and online data gathering techniques; (3) basic and advanced data analysis methods; and (4) the substantial marketing issues that clients are interested in resolving through marketing research.
Chapter 14: Advanced Regression Models
Advanced Regression Models
The previous chapter covered the basics of the powerful and yet simple technique of ordinary least squares (OLS). It was noted that the mathematical relationship between the dependent variable for an observation y t at time t and a vector of independent variables xt can be written in the following manner:
Here, xt' is the transpose of vector xt, and β is a vector of parameters. Also, y t is continuous from–∞ to ∞, and ∊ t is the random error that is typically assumed to be normally distributed.
Several scenarios fit the assumption of a continuous dependent variable that ranges from–∞ to ∞. In cases when y t is strictly positive (e.g., sales), we can transform it as ln(yt) to make ...