The Application of Customer Monetary Spending Model with Hazard Function and Cox Proportional Hazards Mode

Abstract --

This paper bases on the customer monetary spending model to propose the Hazard function to calculate the probability that customer purchase monetary more than a threshold baseline.This threshold baseline can be made by the company to control their minimum avenue through customer spending monetary. We also use Cox proportional hazards mode to find some customers’ characteristic factors which will influence their purchase behavior. The empirical data of customer credit card transactions are used to estimate the parameters of these models. The results show the demographic variables and customer satisfaction have significantly impact on the probability of larger than the unit threshold of the monetary spending. Especially, the customer satisfaction is the highest impact factor than other variables.

Keywords --

Spending monetary, Hazard rate, Cox proportional hazards model.

References --

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About the Author

Hui-Hsin Huang

Hui-Hsin Huang

Department of Business Administration, Aletheia University, New Tipei City, Taiwan

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