"Use of Price Gap Ratios in Sales Models"Some analytic providers use own price plus price gap ratio in sales models. Instead of putting competitor’s price in the model, they use ratio of competitive price to own price. Under normal conditions, this is mathematically equivalent to treating own and competitive prices as separate variables. It neither helps nor hurts results but does add complexity. However, in the degenerate case where competitive price stays constant, own price and gap ratio are 100% correlated, and results can be potentially wrong.