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The evolution of brand preferences : evidence from consumer migration

Author: Bart J Bronnenberg; Jean-Pierre H Dubé; Matthew Gentzkow; National Bureau of Economic Research.
Publisher: Cambridge, MA : National Bureau of Economic Research, ©2010.
Series: Working paper series (National Bureau of Economic Research : Online), working paper no. 16267.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
"We study the long-run evolution of brand preferences, using new data on consumers' life histories and purchases of consumer packaged goods. Variation in where consumers have lived in the past allows us to isolate the causal effect of past experiences on current purchases, holding constant contemporaneous supply-side factors such as availability, prices, and advertising. Heterogeneity in brand preferences explains  Read more...
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Details

Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Bart J Bronnenberg; Jean-Pierre H Dubé; Matthew Gentzkow; National Bureau of Economic Research.
OCLC Number: 657060158
Notes: Title from PDF file as viewed on 9/23/2010.
Description: 1 online resource.
Series Title: Working paper series (National Bureau of Economic Research : Online), working paper no. 16267.
Responsibility: Bart J. Bronnenberg, Jean-Pierre H. Dube, Matthew Gentzkow.

Abstract:

"We study the long-run evolution of brand preferences, using new data on consumers' life histories and purchases of consumer packaged goods. Variation in where consumers have lived in the past allows us to isolate the causal effect of past experiences on current purchases, holding constant contemporaneous supply-side factors such as availability, prices, and advertising. Heterogeneity in brand preferences explains 40 percent of geographic variation in market shares. These preferences develop endogenously as a function of consumers' life histories and are highly persistent once formed, with experiences 50 years in the past still exerting a significant effect on current consumption. Counterfactuals suggest that brand preferences create large entry barriers and durable advantages for incumbent firms, and can explain persistence of early-mover advantage over long periods. Variation across product categories shows that the persistence of brand preferences is related in an intuitive way to both advertising levels and the social visibility of consumption"--National Bureau of Economic Research web site.

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