Out-of-Sample Transfer Error: Median Absolute Value of the Percent Difference in Predicted Elasticities
| Weighing Scheme | Weighted Mean | WLS 1 | WLS 2 | WLS 3 | WLS 4 | WLS 5 | WLS 6 |
|---|---|---|---|---|---|---|---|
| Comparison with Synthetic Observations for Excluded Cluster (n=85) | |||||||
| Variance-adjusted cluster (%) | 92.5 | 90.5 | 87.0 | 108.1 | 93.9 | 119.0 | 104.2 |
| RES cluster-adjusted (%) | 76.0 | 76.3 | 82.7 | 89.4 | 89.4 | 90.7 | 78.9 |
| Comparison with Excluded Cluster Observations (n=260) | |||||||
| Variance-adjusted cluster (%) | 130.5 | 127.5 | 89.8 | 100.5 | 99.9 | 120.3 | 121.4 |
| RES cluster-adjusted (%) | 82.7 | 83.4 | 83.1 | 89.5 | 90.4 | 93.7 | 87.2 |
Note: The out-of-sample transfer error is calculated by iteratively leaving out sets of observations pertaining to each of the K = 66 clusters, estimating the model with the remaining clusters ’ observations, and calculating the predicted elasticities and resulting transfer error for the synthetic observation or the actual observations corresponding to the excluded cluster. RES, random effect size; WLS, weighted least squares.