Has anyone heard about this work before?
What is a "Hierarchical Bayes" approach?
=========Judea
01/07/2001
The Economic Times
Copyright (C) 2001 The Economic Times; Source: World Reporter (TM)
WANT TO know if the next planned blockbuster will hit the charts? Do you
know that thrillers are popular in Japan and Mexico or that romantic movies
doing well in the US, Germany, Sweden and South Africa are least likely to
do well in other international markets? Ask Dr Pradeep Chintagunta,
professor at the University of Chicago who has worked on a unique model
based on the "hierarchical Bayesian" approach, a statistical form that lets
a user input information at more than one stage in the research, that
forecasts the future of an unreleased movie.
According to The Economist, Chintagunta worked along with professor Ramya
Neelamegham, on the Bayesian model using box office figures for 35 movies,
each of which was released in 14 countries, taking into account various
factors, including cultural preferences, genre, and the reputations of
leading actors. Brazil and Britain were found to be the most unpredictable
markets (43 per cent average error rate), with Japan and Germany the most
predictable (only 21 per cent average error rate). So can Bollywood be far
behind and would he work this model for India? Says Chintagunta: "This
should not be a problem as long as accurate numbers are published. One of
the issues is whether reported numbers are correct. Even if they are, will
they be available for several periods - weeks, months - at least for a 'BAS'
set of movies?" Meanwhile, Chintagunta has extended this model to new tech
products like digital cameras. He claims the model can be used in
management. "We have been contacted by a lot of folks. Unfortunately, they
tend to have shortterm needs and do not have the data readily available to
give us." Chintagunta says what really brought him to the US was "not a
very challenging banking job in India." He did his BT in mechanical
engineering from the Institute of Technology, Banaras Hindu University in
1984 and MS (management) from the Indian Institute of Management, Ahmedabad.
Having got his PhD from the Northwestern University, he was an assistant
professor of marketing, Johnson Graduate School of Management, Cornell
University before joining the faculty at the University of Chicago graduate
school of business where he has been since 1995. He was awarded the Hillel
Einhorn Award for Excellence in Teaching, (Barcelona) Program, 1999. His
journalistic career spans many publications as editor, Journal of Business;
area editor, Marketing Science; and associate editor, Management Science,
Journal of Business and Economic Statistics. Life moves at a cerebral pace
at the GSB in the University of Chicago where he teaches marketing strategy
and marketing management. He says: "Working here is terrific. Chicago is as
close to intellectual utopia as you can get. I find it very challenging. I
have colleagues who are super smart and I consider it a privilege to be part
of the group of faculty here. The students, MBA and PhD are also extremely
bright and keep you on your toes." Chintagunta is quite Indian in his food
habits, values, music and films. "My wife is Spanish," he says, "and we need
to get our regular `dosa fix. Family values in Spain and India are very
similar so it works out well. We enjoy spending time with both our families
and try to do it every year if possible." He has researched issues relating
to brand repositioning, new brand introduction, estimation of brand use from
household goods scanner-panel data and has done an analysis of household
purchase behaviour. Using data on supermarket scanners, Chintagunta has
tried to figure out how consumers make purchase decisions. Are they driven
by price? Are they loyal? How do various brands compete with one another for
consumer attention. Currently working on how companies interact with one
another, he adds: "I am just finishing a paper on pharmaceutical pricing.
Firms set prices in many geographic markets (countries) taking into account
the local market response to price, interaction with other firms in other
markets. "For instance, Pfizer may not want to lower prices to compete with
Merck in UK as it knows Merck can retaliate by lowering prices in UK and the
US. The paper attempts to decompose prices into the three components."
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