Marketing Letters

, Volume 26, Issue 4, pp 643–659 | Cite as

How collinearity affects mixture regression results

  • Jan-Michael Becker
  • Christian M. Ringle
  • Marko Sarstedt
  • Franziska Völckner
Article

Abstract

Mixture regression models are an important method for uncovering unobserved heterogeneity. A fundamental challenge in their application relates to the identification of the appropriate number of segments to retain from the data. Prior research has provided several simulation studies that compare the performance of different segment retention criteria. Although collinearity between the predictor variables is a common phenomenon in regression models, its effect on the performance of these criteria has not been analyzed thus far. We address this gap in research by examining the performance of segment retention criteria in mixture regression models characterized by systematically increased collinearity levels. The results have fundamental implications and provide guidance for using mixture regression models in empirical (marketing) studies.

Keywords

Market segmentation Segment retention Mixture regression Collinearity 

Supplementary material

11002_2014_9299_MOESM1_ESM.docx (91 kb)
ESM 1(DOCX 90.7 kb)

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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  • Jan-Michael Becker
    • 1
  • Christian M. Ringle
    • 2
    • 4
  • Marko Sarstedt
    • 3
    • 4
  • Franziska Völckner
    • 1
  1. 1.Department of Marketing and Brand ManagementUniversity of CologneCologneGermany
  2. 2.Institute of Human Resource Management and Organizations (HRMO)Hamburg University of Technology (TUHH)HamburgGermany
  3. 3.Institute of MarketingOtto-von-Guericke-University MagdeburgMagdeburgGermany
  4. 4.School of Business and LawUniversity of NewcastleCallaghanAustralia

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