Statistical Methods in Customer Relationship Management

Appendix H

Discrete-Time Hazard

(Source: Cameron and Trivedi [1])

The starting point is to define the discrete-time hazard function as the probability of transaction at discrete time given survival to time :

(H.1)

where the superscript d denotes discrete, and where , an adjustment made because formally equals rather than .

The discrete-time survivor function is obtained recursively from the hazard function as

(H.2)

For example, equals the probability of no transition at time times the probability ...