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

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Show simple item record Klapper, Daniel en_US Eckert, Christine en_US Temme, Jarg en_US
dc.contributor.editor en_US 2010-05-28T09:54:57Z 2010-05-28T09:54:57Z 2005 en_US
dc.identifier 2008000470 en_US
dc.identifier.citation Klapper Daniel, Ebling Christine, and Temme Jarg 2005, 'Another Look at Loss Aversion in Brand Choice Data: Can we Characterize the Loss Averse Consumer?', Elsevier Inc, vol. 22, no. 3, pp. 239-254. en_US
dc.identifier.issn 0167-8116 en_US
dc.identifier.other C1UNSUBMIT en_US
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. en_US
dc.language en_US
dc.publisher Elsevier Inc en_US
dc.relation.isbasedon en_US
dc.title Another Look at Loss Aversion in Brand Choice Data: Can we Characterize the Loss Averse Consumer? en_US
dc.parent International Journal of Research in Marketing en_US
dc.journal.volume 22 en_US
dc.journal.number 3 en_US
dc.publocation Amsterdam, Netherlands en_US
dc.identifier.startpage 239 en_US
dc.identifier.endpage 254 en_US BUS.School of Marketing en_US
dc.conference Verified OK en_US
dc.for 150500 en_US
dc.personcode 0000047147 en_US
dc.personcode 103760 en_US
dc.personcode 0000047148 en_US
dc.percentage 100 en_US Marketing en_US
dc.classification.type FOR-08 en_US
dc.edition en_US
dc.custom en_US en_US
dc.location.activity en_US
dc.description.keywords Reference price; Loss aversion; Heterogeneity en_US

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