Preference Heterogeneity and Habit Persistence: The Case of Breakfast Cereal Consumption
AbstractThis 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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Bibliographic InfoPaper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 738.
Length: 31 pages
Date of creation: 15 May 2008
Date of revision:
Contact details of provider:
Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
Phone: 090 - 786 61 42
Fax: 090 - 77 23 02
Web page: http://www.econ.umu.se/
More information through EDIRC
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; Discrete Regressors; Proportions
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-05-24 (Agricultural Economics)
- NEP-ALL-2008-05-24 (All new papers)
- NEP-DCM-2008-05-24 (Discrete Choice Models)
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