Sample Size Requirements for Zero-Order Models

Abstract

The authors report the sample sizes required to obtain maximum likelihood estimates of parameters in a zero-order model. In the typical formulation of the model, parameter estimation requires about 2000 individuals with five purchases per consumer. The original parameters can be easily transformed, however, into a market share estimate and a polarization index that convey the key information sought from the model. Estimation of the transformed parameters requires smaller samples of about 400 individuals with five purchases per consumer.