Detecting price thresholds in choice models using a semi-parametric approach

Yasemin Boztuǧ*, Lutz Hildebrandt, Kalyan Raman

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

8 Scopus citations


The semi-parametric methodology, underutilized in marketing, can be applied to distinguish between competing models of price response and to estimate the model that most validly describes consumer response to price. The methodology is robust and flexible, thereby making it applicable to a wide spectrum of models of consumer response. In the specific context of reference prices, we show that the semi-parametric methodology helps the manager develop price promotions that most effectively capitalize on the nature of consumer price response.

Original languageEnglish (US)
Pages (from-to)187-207
Number of pages21
JournalOR Spectrum
Issue number1
StatePublished - Jan 2014


  • Loss aversion
  • Multinomial logit model
  • Reference price
  • Semi-parametric estimation
  • Threshold

ASJC Scopus subject areas

  • Management Science and Operations Research


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