Another Look at Loss Aversion in Brand Choice Data: Can we Characterize the Loss Averse Consumer?

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dc.contributor.author Klapper, D
dc.contributor.author Eckert, C
dc.contributor.author Temme, J
dc.date.accessioned 2010-05-28T09:54:57Z
dc.date.issued 2005-01
dc.identifier.citation International Journal of Research in Marketing, 2005, 22 (3), pp. 239 - 254
dc.identifier.issn 0167-8116
dc.identifier.other C1UNSUBMIT en_US
dc.identifier.uri http://hdl.handle.net/10453/10239
dc.description.abstract Much research has focused on the effects of reference prices on brand choice decisions using scanner panel data. The theory and application are well-documented and accepted. However, researchers have found contrary results on the existence of loss aversion in consumer goods markets. Loss aversion is a phenomenon based on the reference dependent theory that consumers respond more to losses (reference price < price) than to gains (reference price > price). The mixed results on the existence of loss aversion can be a result of not adequately accounting for consumer heterogeneity in response to marketing effects. Therefore, we focus our analysis on loss aversion and adequately accounting for consumer heterogeneity. We estimate a reference dependent model with a mixed logit specification that allows for a continuous distribution of response heterogeneity in the population. We use Gibbs Sampling to obtain individual estimates. Our estimation results from two different consumer goods categories, which show that the degree of loss aversion is small after properly accounting for heterogeneity. Further, we accomplish a posterior analysis and investigate whether the individual response to gains and losses can be attributed to consumer specific characteristics. The relation of the estimated individual specific variables to households' sociodemographic and psychographic variables as well as to observed purchase behavior reveal interesting insights into which consumers respond more or less to price deviations from their reference point. Hence, our results are important for the development of effective pricing strategies and the timing of price promotions.
dc.publisher Elsevier Inc
dc.relation.isbasedon 10.1016/j.ijresmar.2004.09.002
dc.title Another Look at Loss Aversion in Brand Choice Data: Can we Characterize the Loss Averse Consumer?
dc.type Journal Article
dc.parent International Journal of Research in Marketing
dc.journal.volume 3
dc.journal.volume 22
dc.journal.number 3 en_US
dc.publocation Amsterdam, Netherlands en_US
dc.identifier.startpage 239 en_US
dc.identifier.endpage 254 en_US
dc.cauo.name BUS.School of Marketing en_US
dc.conference Verified OK en_US
dc.for 1505 Marketing
dc.personcode 103760
dc.percentage 100 en_US
dc.classification.name Marketing en_US
dc.classification.type FOR-08 en_US
dc.edition en_US
dc.custom en_US
dc.date.activity en_US
dc.location.activity en_US
dc.description.keywords Reference price; Loss aversion; Heterogeneity en_US
dc.description.keywords Reference price
dc.description.keywords Loss aversion
dc.description.keywords Heterogeneity
pubs.embargo.period Not known
pubs.organisational-group /University of Technology Sydney
pubs.organisational-group /University of Technology Sydney/Faculty of Business
pubs.organisational-group /University of Technology Sydney/Faculty of Business/School of Marketing
utslib.copyright.status Closed Access
utslib.copyright.date 2015-04-15 12:17:09.805752+10
utslib.collection.history Closed (ID: 3)


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