Research Tips

Bayesian Methods

Advances in computing power and software have made Bayesian methods more accessible to people doing market research. Bayesian methods differ from traditional statistics in that they rely on the use of prior information and they update estimates as new observations are made. These characteristics make Bayesian methods particularly attractive for many types of problems that market researchers investigate. For example, the likelihood of a person making a purchase from a retailer could be estimated using Bayesian methods. The estimate could be based on the customer’s purchase history, and updated based on new actions such as visiting a Web site, entering a physical store, or calling an 800 number.