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Preference Heterogeneity and Habit Persistence: The Case of Breakfast Cereal Consumption

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Author Info
Thunström, Linda () (Department of Economics, Umeå University)
Abstract

This paper estimates the strength and heterogeneity across households in state dependence associated with breakfast cereal consumption, where positive state dependence implies habit persistence and negative state dependence implies variety-seeking in consumption. The analysis relies on a discrete choice model and finds that breakfast cereal consumption is generally highly habitual, but the degree of habit persistence exhibits heterogeneity across households. In addition, some households can be characterized as variety-seeking. The strength of habit persistence is similar across income and educational groups. The strength of habit persistence seems to be weaker for households with several adults and children compared to one-adult-households.

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File URL: http://www.econ.umu.se/ues/ues738.pdf
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Publisher Info
Paper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 738.

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Length: 31 pages
Date of creation: 15 May 2008
Date of revision:
Handle: RePEc:hhs:umnees:0738

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Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
Phone: 090 - 786 61 42
Fax: 090 - 77 23 02
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Web page: http://www.econ.umu.se/
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Related research
Keywords: consumer choice habit persistence food consumption preference heterogeneity

Find related papers by JEL classification:
C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models
D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

This paper has been announced in the following NEP Reports:

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  1. Raquel Carrasco & José M. Labeaga & J. David López-Salido, 2005. "Consumption and Habits: Evidence from Panel Data," Economic Journal, Royal Economic Society, vol. 115(500), pages 144-165, 01. [Downloadable!] (restricted)
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  2. Benaissa Chidmi & Rigoberto A. Lopez, 2007. "Brand-Supermarket Demand for Breakfast Cereals and Retail Competition," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 89(2), pages 324-337, 05. [Downloadable!] (restricted)
  3. M. Dolores Collado & Martin Browning, 2007. "Habits and heterogeneity in demands: a panel data analysis," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(3), pages 625-640. [Downloadable!]
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  4. Karen E. Dynan, 2000. "Habit Formation in Consumer Preferences: Evidence from Panel Data," American Economic Review, American Economic Association, vol. 90(3), pages 391-406, June. [Downloadable!] (restricted)
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This page was last updated on 2008-8-29.


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