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An Investigation of the Assumptions of the Nbd Model as Applied to Purchasing at Individual Stores
Author(s) -
Dunn R.,
Reader S.,
Wrigley N.
Publication year - 1983
Publication title -
journal of the royal statistical society: series c (applied statistics)
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.205
H-Index - 72
eISSN - 1467-9876
pISSN - 0035-9254
DOI - 10.2307/2347947
Subject(s) - purchasing , econometrics , computer science , operations research , statistics , mathematics , economics , operations management
SUMMARY This paper presents an empirical investigation of the assumptions of the NBD model in the context of purchasing at individual stores. A formal testing procedure against the assumption that individuals' inter‐purchase times follow an exponential distribution shows that the Poisson assumption of the NBD model holds for the majority of consumers. The theoretical negative binomial also fits closely for centrally located stores. For suburban stores the relevant population hypothesis is of some importance, and refitting the model to a local subset of the sample removes certain small but consistent discrepancies. The NBD model may thus play an important role in studies of urban consumer behaviour.