Answer for Price Elasticities with and without Promotion

https://365datascience.com/dwqa-answer/answer-for-price-elasticities-with-and-without-promotion/ -

Hi Jo, 

thanks for reaching out!

The reason we have different price elasticities is exactly as you say – because we have two different models. Our models determine the prices elasticity based on the input features, and in the second case we have a promotion feature. Although we assume there is no promotion at the time, we still factor it in the decision making process, which is why we get different results in both cases. 

 

Best, 

365 Eli 

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