Pricing

Appendix B

Pricing Analytics Using R

In this appendix, we introduce the open source statistical software environment R and show how it can be used for pricing analytics. In the coming sections, we cover basic information aimed to help you get started with R. We will illustrate specific topics and features of R while discussing these elements using real pricing problems. We combine these disparate elements into a single, standalone pricing application in the section that concludes the appendix.

The R Environment

In a recent article in the New York Times, R, as a computing environment, is portrayed as being important “to the point that it’s hard to overvalue it.”¹ R is credited with “becoming [the data analysts’] lingua franca partly because data ...