Modeling Price Elasticity - Part 1: Own-Price-Elasticity

October 13, 2015



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This experiment demonstrates how to build a basic price elasticity model.
Price elasticity is the foundation of price optimization. This experiment uses the transaction data of a chowder store to show how to determine the price elasticity of chowder. It is the first demo experiment in the [Cortana Analytics Webinar for Retail Pricing][1]. **Input**: Daily price and demand of chowder. **Output**: The chowder's price elasticity. See the output port of 'Train Model'. The feature weight of 'Log_Price_Chowder' is the price elasticity. **Related Resources**: Check the video of the [Cortana Analytics Webinar for Retail Pricing][1] which is hosted also by Xueshan to learn the concept of price elasticity and the three steps to do price optimization. Created by a Microsoft Employee. [1]: