Taste and Quality Perception of Attributes in Product Differentiation: An Econometric Model with Latent Variables
AbstractWe study the consumers' preferences for the various attributes of a product. We consider that the consumers'choices are not guided by observed characteristics of a product, but by the quality perception consumers have on these attributes. Our model integrates this issue by means of latent variables, and is interested in the influence of the information received by the consumer on this perception. It also includes consumers' attitudes by supposing that the weight consumers put on attributes describes their tastes. An econometric application on material choices (wood vs. PVC) in the French window market valid these assumptions.
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Bibliographic InfoPaper provided by Laboratoire d'Economie Forestiere, AgroParisTech-INRA in its series Working Papers - Cahiers du LEF with number 2006-01.
Length: 26 pages
Date of creation: May 2007
Date of revision:
quality perception; information; taste; latent variable model; wood;
Find related papers by JEL classification:
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
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- Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-54, July/Aug..
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