simulate_hurdle_data: Simulate Data from Two-Part Mixed Effects Hurdle Demand Model

Description

Generates simulated demand data from the two-part hurdle model. Useful for Monte Carlo simulation studies, power analyses, and model validation.

Usage

simulate_hurdle_data(
  n_subjects = 100,
  prices = seq(0, 11, by = 0.5),
  beta0 = -2,
  beta1 = 1,
  log_q0 = log(10),
  logQ0 = deprecated(),
  k = 2,
  alpha = 0.5,
  sigma_a = 1,
  sigma_b = 0.5,
  sigma_c = 0.1,
  rho_ab = 0.3,
  rho_ac = 0,
  rho_bc = 0,
  sigma_e = 0.3,
  epsilon = 0.001,
  n_random_effects = 2,
  stop_at_zero = TRUE,
  seed = NULL
)

Value

A data frame with columns:

id: Subject identifier
x: Price value
y: Simulated consumption (may include zeros)
delta: Indicator for zero consumption (1 = zero, 0 = positive)
a_i: Subject-specific random effect for Part I
b_i: Subject-specific random effect for Part II
c_i: Subject-specific random effect for alpha (if n_random_effects = 3)

Arguments

n_subjects: Number of subjects to simulate. Default is 100.
prices: Numeric vector of prices at which to simulate consumption. Default is seq(0, 11, by = 0.5).
beta0: Intercept for Part I (logistic). Default is -2.
beta1: Slope for Part I (on log(price + epsilon)). Default is 1.
log_q0: Log of intensity parameter (Q0). Default is log(10), meaning Q0 = 10. To specify Q0 directly, use log_q0 = log(your_Q0).
logQ0: Use log_q0 instead.
k: Scaling parameter for demand decay. Default is 2.
alpha: Elasticity parameter controlling rate of demand decay. Default is 0.5.
sigma_a: Standard deviation of random intercept for Part I. Default is 1.
sigma_b: Standard deviation of random intercept for Part II. Default is 0.5.
sigma_c: Standard deviation of random slope for alpha (only used if n_random_effects = 3). Default is 0.1.
rho_ab: Correlation between a_i and b_i. Default is 0.3.
rho_ac: Correlation between a_i and c_i. Default is 0.
rho_bc: Correlation between b_i and c_i. Default is 0.
sigma_e: Residual standard deviation. Default is 0.3.
epsilon: Small constant for log(price + epsilon). Default is 0.001.
n_random_effects: Number of random effects (2 or 3). Default is 2.
stop_at_zero: Logical; if TRUE, stop generating observations for a subject once zero consumption is observed. This means subjects will have varying numbers of observations. Set to FALSE to generate all prices for all subjects. Default is TRUE.
seed: Optional random seed for reproducibility.

Details

The simulation follows Zhao et al. (2016):

Part I (Zero vs Positive): $$logit(P(Y=0)) = \beta_0 + \beta_1 \cdot \log(price + \epsilon) + a_i$$

Part II (Positive Consumption): $$\log(Y | Y > 0) = (\log Q_0 + b_i) + k \cdot (\exp(-(\alpha + c_i) \cdot price) - 1) + \epsilon$$

Random effects $(a_i, b_i)$ or $(a_i, b_i, c_i)$ are drawn from a multivariate normal distribution with the specified variances and correlations.

Examples

Run this code

# Simulate with default parameters (2 RE model)
sim_data <- simulate_hurdle_data(n_subjects = 100, seed = 123)
head(sim_data)

# Simulate with custom prices
apt_prices <- c(0, 0.25, 0.5, 1, 1.5, 2, 2.5, 3, 4, 5, 6, 7, 8, 9, 10)
sim_apt <- simulate_hurdle_data(n_subjects = 100, prices = apt_prices, seed = 123)

# Simulate with custom parameters (Q0 = 15, alpha = 0.1)
sim_custom <- simulate_hurdle_data(
  n_subjects = 100,
  log_q0 = log(15),
  alpha = 0.1,
  seed = 123
)

# Simulate 3 RE model
sim_3re <- simulate_hurdle_data(
  n_subjects = 100,
  n_random_effects = 3,
  sigma_c = 0.1,
  seed = 456
)