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The Intergenerational Transmission of Automobile Brand Preferences: Empirical Evidence and Implications for Firm Strategy

Author

Listed:
  • Soren T. Anderson
  • Ryan Kellogg
  • Ashley Langer
  • James M. Sallee

Abstract

We document a strong correlation in the brand of automobile chosen by parents and their adult children, using data from the Panel Study of Income Dynamics. This correlation could represent transmission of brand preferences across generations, or it could result from correlation in family characteristics that determine brand choice. We present a variety of empirical specifications that lend support to the former interpretation and to a mechanism that relies at least in part on state dependence. We then discuss implications of intergenerational brand preference transmission for automakers' product-line strategies and for the strategic pricing of vehicles to different age groups.

Suggested Citation

  • Soren T. Anderson & Ryan Kellogg & Ashley Langer & James M. Sallee, 2013. "The Intergenerational Transmission of Automobile Brand Preferences: Empirical Evidence and Implications for Firm Strategy," NBER Working Papers 19535, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:19535
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    File URL: http://www.nber.org/papers/w19535.pdf
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    References listed on IDEAS

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    1. David Atkin, 2013. "Trade, Tastes, and Nutrition in India," American Economic Review, American Economic Association, vol. 103(5), pages 1629-1663, August.
    2. Bart J. Bronnenberg & Jean-Pierre H. Dube & Matthew Gentzkow, 2012. "The Evolution of Brand Preferences: Evidence from Consumer Migration," American Economic Review, American Economic Association, vol. 102(6), pages 2472-2508, October.
    3. Kenneth E. Train & Clifford Winston, 2007. "Vehicle Choice Behavior And The Declining Market Share Of U.S. Automakers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(4), pages 1469-1496, November.
    4. Paul Klemperer, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, Oxford University Press, vol. 102(2), pages 375-394.
    5. Fred Mannering & Clifford Winston, 1985. "A Dynamic Empirical Analysis of Household Vehicle Ownership and Utilization," RAND Journal of Economics, The RAND Corporation, vol. 16(2), pages 215-236, Summer.
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    Cited by:

    1. Cosar, Kerem & Grieco, Paul L. E. & Li, Shengyu & Tintelnot, Felix, 2015. "What Drives Home Market Advantage?," CEPR Discussion Papers 10852, C.E.P.R. Discussion Papers.
    2. Itzhak Gilboa & Andrew Postlewaite & David Schmeidler, 2015. "Consumer Choice as Constrained Imitation," PIER Working Paper Archive 15-013, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.

    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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