Causal inference for contemporaneous effects and its application to tourism product sales data

Abstract

Many studies examined negative causal effects between items sold in retail stores, including sales cannibalization, a process by which the sales of new products and sales promotions possibly decrease the sales of other products. Souvenir shops usually have only one opportunity to sell products to each visitor because of their nature. Thus, clarifying the contemporaneous causal relationships among the sales of products sold in souvenir shops is much more important. We propose that there are informative causal relations among the sales of tourism products. We develop a methodology to estimate these causalities given exogenous factors without specifying the causal directions. The proposed model is a structural vector auto regressive model with exogenous variables, and its estimation method is a modified vector auto regressive model to a linear non-Gaussian cyclic model. Applying the proposed methodology, we analyzed point of sale data from a souvenir shop. The results show that tourists who purchase tourism products of an ideal size for office/workplace souvenirs tend to simultaneously purchase other tourism products of the same size or products for households. The obtained result can help marketers plan sales promotions and inventory controls.