2012 Volume 39 Issue 2 Pages 93-101
In marketing, measurement of customers’ price sensitivity is regarded as important. If analysts can measure the price sensitivity of each customer, that data can be used as a base for determining how to approach customers. In this paper, a new model is proposed for measuring the individual price sensitivity of customers based on item response theory, which is a mathematical theory for developing and evaluating a test; using item response theory makes it possible to measure price sensitivity on a uniform scale. Parameters were estimated by using Markov chain monte carlo methods, and we show examples of applications of the proposed model to ID-POS data.
