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How Brand Names Affect the Price Setting of Carmakers Producing Twin Cars?

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Author Info
Nora LADO
Omar LICANDRO
Francisco PÉREZ

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Abstract

In the automobile sector, it is a usual practice that independent carmakers engage in the development and production of a common car model, the so-called twin cars. From the point of view of the marketing literature, we claim that carmakers should not charge different brand premia on separate models of a twin car. We use hedonic regressions and panel data estimators to valuate brand premia, by controlling for quality diversity. We find that there are no significant differences between brand premia of separate models of a twin car, even if brand premia may differ across different carmakers.

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Paper provided by European University Institute in its series Economics Working Papers with number ECO2004/01.

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Date of creation: 2004
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Handle: RePEc:eui:euiwps:eco2004/01

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M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Breusch, T S & Pagan, A R, 1980. "The Lagrange Multiplier Test and Its Applications to Model Specification in Econometrics," Review of Economic Studies, Blackwell Publishing, vol. 47(1), pages 239-53, January. [Downloadable!] (restricted)
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  1. José A. Herce, . "Could this ever happen in Spain? Economic and policy aspects of a SARS-like episode," Working Papers 2004-09, FEDEA. [Downloadable!]
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