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An instrumental variable approach to distinguishing perceptions from preferences for beer brands

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  • Trey Malone
  • Jayson L. Lusk

Abstract

Recent developments in behavioral economics have prompted interest in identifying how product perceptions and beliefs influence decision making. Using a branded discrete choice experiment for beer, this article uses the control function approach and plausible instruments to correct for the endogeneity problem in a way that is applicable in a wide range of circumstances. Even after correction, we find that perceptions substantially affect consumer choices. In the context of brand equity for beer brands, we find that the perceived taste and brand familiarity are key determinants of choice.

Suggested Citation

  • Trey Malone & Jayson L. Lusk, 2018. "An instrumental variable approach to distinguishing perceptions from preferences for beer brands," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 39(4), pages 403-417, June.
    • Handle: RePEc:wly:mgtdec:v:39:y:2018:i:4:p:403-417
    DOI: 10.1002/mde.2913
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    Cited by:

    1. Aaron J. Staples & Carson J. Reeling & Nicole J. Olynk Widmar & Jayson L. Lusk, 2020. "Consumer willingness to pay for sustainability attributes in beer: A choice experiment using eco‐labels," Agribusiness, John Wiley & Sons, Ltd., vol. 36(4), pages 591-612, October.
    2. Trey Malone & Antonios M. Koumpias & Per L. Bylund, 2019. "Entrepreneurial response to interstate regulatory competition: evidence from a behavioral discrete choice experiment," Journal of Regulatory Economics, Springer, vol. 55(2), pages 172-192, April.
    3. Sergio Rivaroli & Martin K. Hingley & Roberta Spadoni, 2018. "The motivation behind drinking craft beer in Italian brew pubs: a case study," Economia agro-alimentare, FrancoAngeli Editore, vol. 20(3), pages 425-443.
    4. Trey Malone & F. Bailey Norwood, 2020. "Gluten aversion is not limited to the political left," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 37(1), pages 1-15, March.
    5. Marco Costanigro & Yuko Onozaka, 2020. "A Belief‐Preference Model of Choice for Experience and Credence Goods," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(1), pages 70-95, February.
    6. Irani-Kermani, Roozbeh & Jaenicke, Edward C., 2018. "Generalizing Variety Seeking Measurement from Brand Space to Product Attribute Space," 2018 Annual Meeting, August 5-7, Washington, D.C. 273818, Agricultural and Applied Economics Association.
    7. Wossen, Tesfamicheal & Spielman, David J. & Alene, Arega D. & Abdoulaye, Tahirou, 2024. "Estimating seed demand in the presence of market frictions: Evidence from an auction experiment in Nigeria," Journal of Development Economics, Elsevier, vol. 167(C).

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