Estimating Purchase Regularity with Two Interpurchase Times

Abstract

Determining how regularly purchases occur is an elemental step in modeling and interpreting several aspects of purchase behavior. Methods that calculate regularity at the individual level lack power when the number of observations is small and are confounded by nonstationary behavior when the number of observations is large. The authors present a summary statistic to calculate purchase regularity across consumers, using at a minimum only two interpurchase times per customer.