Retailer Choice and Loyalty Schemes - Evidence from Sweden
AbstractFrom economic theory, it is known that consumer loyalty schemes can have lock-in effects resulting in entry barriers and higher prices. This paper concerns consumer loyalty schemes where the main issue is to test the hypothesis that loyalty scheme membership affects the choice of food retailer. This choice is modeled as a random utility maximization problem estimated with maximum likelihood. Based on a data set covering 1,551 Swedish households, we find evidence supporting this hypothesis. Further, according to the results, store characteristics and geographical distance matter for the choice of retailer while household characteristics are not found to have a significant effect.
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Bibliographic InfoPaper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 801.
Length: 34 pages
Date of creation: 09 Feb 2010
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
Bonus card; Conditional logit; Consumer choice; Distance; Food retailer; Loyalty scheme;
Other versions of this item:
- Johan Lundberg & Sofia Lundberg, 2010. "Retailer choice and loyalty schemes—evidence from Sweden," Letters in Spatial and Resource Sciences, Springer, vol. 3(3), pages 137-146, October.
- Lundberg, Johan & Lundberg, Sofia, 2010. "Retailer Choice and Loyalty Schemes - Evidence from Sweden," UmeÃ¥ Economic Studies 34, Umeå University, Department of Economics.
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- L49 - Industrial Organization - - Antitrust Issues and Policies - - - Other
- L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
- R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
This paper has been announced in the following NEP Reports:
- NEP-AGR-2010-02-20 (Agricultural Economics)
- NEP-ALL-2010-02-20 (All new papers)
- NEP-COM-2010-02-20 (Industrial Competition)
- NEP-DCM-2010-02-20 (Discrete Choice Models)
- NEP-MKT-2010-02-20 (Marketing)
- NEP-URE-2010-02-20 (Urban & Real Estate Economics)
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.:
- Beggs, Alan W & Klemperer, Paul, 1992.
"Multi-period Competition with Switching Costs,"
Econometric Society, vol. 60(3), pages 651-66, May.
- Carlsson, Fredrik & Löfgren, Åsa, 2004.
"Airline choice, switching costs and frequent flyer programs,"
Working Papers in Economics
123, University of Gothenburg, Department of Economics.
- Fredrik Carlsson & �sa Lofgren, 2006. "Airline choice, switching costs and frequent flyer programmes," Applied Economics, Taylor and Francis Journals, vol. 38(13), pages 1469-1475.
- Joshua S. Gans & Stephen P. King, 2006. "PAYING FOR LOYALTY: PRODUCT BUNDLING IN OLIGOPOLY -super-* ," Journal of Industrial Economics, Wiley Blackwell, vol. 54(1), pages 43-62, 03.
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