Removing the Boundary Between Structural and Reduced-Form Models

The authors provide a comprehensive and useful review of structural models in marketing (Chintagunta et al. 2006). They evaluate the strengths and limitations of a structural approach and present examples of recent advancements in the development and application of structural models. Their discussion on the directions for future studies is very insightful. Despite the growing trend in the literature to claim contribution by offering structural treatments to research questions, it remains arbitrary and sometimes mysterious as to what constitutes a “structural” model. I agree with the authors that artificial boundaries are commonly imposed in our field between structural and reduced-form models. I believe it is more constructive to classify research studies along a structural/reduced-form continuum than to draw a distinctive line between, or even develop different research paradigms around, them. My objective in this discussion is to provide further insights into the structural/reduced-form continuum. I first argue that this continuum is usually multidimensional, and one can move up the continuum in two directions. Following the argument are some examples of how the studies in the literature can be positioned along the continuum. I also discuss the role of data in developing more structural models. I argue that limited data quality can be a “double-edged sword” for the use of more structural models and that data integration and researcher creativity can be substitutes for limited data quality. Directions for future research on moving up the structural/reduced-form continuum are also identified. The discussion intends to support the complementarity between “structural” and “reduced-form” models, and the need to break the boundary between them.