State Dependence and Preference Heterogeneity: The Hand of the Past on Breakfast Cereal Consumption
| dc.creator | Békési, Dániel | |
| dc.creator | Loy, Jens-Peter | |
| dc.creator | Weiss, Christoph | |
| dc.date | 2017-04-01T19:56:37Z | |
| dc.date.accessioned | 2026-07-09T07:31:17Z | |
| dc.description | By explicitly accounting for observed and unobserved taste heterogeneity, we investigate state dependence in food consumption on household level. Positive state dependence, which can be interpreted as a loyalty measure, implies habit persistence, whereas negative state dependence implies variety-seeking behavior. Using ConsumerScan data for 2,717 households in Germany for a four-year period (2000 until 2003), we apply mixed multinomial (random coefficient) logit models to analyze consumption behavior in the breakfast cereal market. We find substantial heterogeneity between households: the majority of them express some degree of positive state dependence, which depreciates over time. Merely a small share of the households can be characterized as variety-seekers. The analysis sheds light on the correlation between price sensitivity and loyalty. More state dependent households seem to be more sensitive to price changes. By obtaining household-specific coefficients, we are able to define each household´s position on the distribution of the parameters. Comparing state dependence coefficients and two further loyalty measures (brand-runs and repurchase probabilities), we observe a positive correlation between these, which underpins the importance of the effect of prior consumption. As a diagnostic check, the unconditional distributions of the parameters and the average of the distributions conditional on previous choices are compared. | |
| dc.identifier | doi:10.22004/ag.econ.158699 | |
| dc.identifier | https://ageconsearch.umn.edu/record/158699/files/Daniel_Bekesi_Paper__Bekesi_Loy_Weiss.pdf | |
| dc.identifier | http://ageconsearch.umn.edu/record/158699 | |
| dc.identifier.uri | http://hdl.handle.net/123456789/589210 | |
| dc.language | eng | |
| dc.publisher | ||
| dc.source | http://ageconsearch.umn.edu/record/158699 | |
| dc.title | State Dependence and Preference Heterogeneity: The Hand of the Past on Breakfast Cereal Consumption | |
| dc.type | Text |