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

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  • 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.

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  • 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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    Cited by:

    1. Hai Che & Tülin Erdem & T. Sabri Öncü, 2015. "Consumer learning and evolution of consumer brand preferences," Quantitative Marketing and Economics (QME), Springer, vol. 13(3), pages 173-202, September.
    2. Coşar, A. Kerem & Grieco, Paul L.E. & Li, Shengyu & Tintelnot, Felix, 2018. "What drives home market advantage?," Journal of International Economics, Elsevier, vol. 110(C), pages 135-150.
    3. DeCicca, Philip & Kenkel, Donald & Liu, Feng & Somerville, Jason, 2021. "Quantifying brand loyalty: Evidence from the cigarette market," Journal of Health Economics, Elsevier, vol. 79(C).
    4. Samuel Nathan Kirshner & Yuri Levin & Mikhail Nediak, 2017. "Product Upgrades with Stochastic Technology Advancement, Product Failure, and Brand Commitment," Production and Operations Management, Production and Operations Management Society, vol. 26(4), pages 742-756, April.
    5. Hai Che & Tülin Erdem & T. Öncü, 2015. "Consumer learning and evolution of consumer brand preferences," Quantitative Marketing and Economics (QME), Springer, vol. 13(3), pages 173-202, September.
    6. 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.

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    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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