Used Beta5 in Segments
In coding for the well off Segment, why did you use the the first general estimated beta5 (which equal -1.09) and didn't use the newly estimated beta5 after filtering the well off segment that is equal to (-.44).
As there is a huge difference appears in the own and cross brand graphs comparisons?
Hi Arsany,
thanks for reaching out! We used the beta5 in both cases, because we're basing it off the formula for price elasticity. In the case of the cross elasticity we still need the coefficient for the own price elasticity to solve the equation. This is probably the most confusing part of the course, and a lot of other students have asked questions about that. The short answer is that beta5 is correct, based on the formula we're using, and if you're interested in digging in further you can check out the notes on the price elasticity derivations to see how this formula is obtained.
Let me know if you have any other questions!
Best,
365 Eli
So, this part of the code (for all other segments, too):# Coefficients table segment 0.bc_coef = pd.DataFrame(np.transpose(model_brand_choice_s0.coef_))bc_coef.columns = [coefficients]bc_coef.index = [prices]bc_coef = bc_coef.round(2)bc_coef
Doesn't have anything to do with beta?