Behavioral economic demand modeling chronology, complexities, and considerations: Much ado about zeros

Area of Science:

• Behavioral Economics
• Econometrics

Background:

• Behavioral economic demand quantifies commodity value through cost-consumption relationships.
• Demand models are typically curvilinear, with consumption decreasing as cost rises.
• Significant advancements in demand modeling have occurred over three decades, yet challenges persist.

Purpose of the Study:

• To provide a historical overview of major behavioral economic demand models.
• To describe common analytical difficulties in demand analysis.
• To discuss general considerations for analyzing behavioral economic demand.

Main Methods:

• Review of historical behavioral economic demand models.
• Identification and description of analytical challenges, particularly modeling zero consumption values.
• Discussion of general analytical considerations.

Main Results:

• Behavioral economic demand is a valuable tool for quantifying commodity value.
• Modeling zero consumption values presents persistent analytical challenges.
• Transparency and sensitivity analyses are crucial for scientific rigor.

Conclusions:

• Continued evolution in demand modeling necessitates careful analytical choices.
• Researchers must embrace transparency and employ sensitivity analyses to ensure robust conclusions.
• Addressing analytical challenges, especially concerning zero values, remains an active area of research.