NBER Working Papers by Günter J. Hitsch

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Working Papers

August 2015Income and Wealth Effects on Private-Label Demand: Evidence From the Great Recession
with Jean-Pierre Dubé, Peter E. Rossi: w21446
We measure the causal effects of income and wealth on the demand for private-label products. Prior research suggests that these effects are large and, in particular, that private-label demand rises during recessions. Our empirical analysis is based on a comprehensive household-level transactions database matched with price information from store-level scanner data and wealth data based on local house value indices. The Great Recession provides a key source of the variation in our data, with a large and geographically diverse impact on household incomes over time. We estimate income and wealth effects using “within” variation of income and wealth at the household level. Our estimates can be interpreted as income and wealth effects consistent with a consumer demand model based on utility max...
September 2012The Joint Identification of Utility and Discount Functions From Stated Choice Data: An Application to Durable Goods Adoption
with Jean-Pierre H. Dube, Pranav Jindal: w18393
We present a survey design that generalizes static conjoint experiments to elicit inter-temporal adoption decisions for durable goods. We show that consumers' utility and discount functions in a dynamic discrete choice model are jointly identified using data generated by this specific design. In contrast, based on revealed preference data, the utility and discount functions are generally not jointly identified even if consumers' expectations are known. The separation of current-period preferences from discounting is necessary to forecast the diffusion of a durable good under alternative marketing strategies. We illustrate the approach using two surveys eliciting Blu-ray player adoption decisions. Both model-free evidence and the estimates based on a dynamic discrete choice model indicate t...

Published: Quantitative Marketing and Economics December 2014, Volume 12, Issue 4, pp 331-377 Date: 10 Sep 2014 The Joint identification of utility and discount functions from stated choice data: An application to durable goods adoption Jean-Pierre Dubé, Günter J. Hitsch, Pranav Jindal

April 2009State Dependence and Alternative Explanations for Consumer Inertia
with Jean-Pierre Dubé, Peter E. Rossi: w14912
For many consumer packaged goods products, researchers have documented a form of state dependence whereby consumers become "loyal" to products they have consumed in the past. That is, consumers behave as though there is a utility premium from continuing to purchase the same product as they have purchased in the past or, equivalently, there is a psychological cost to switching products. However, it has not been established that this form of state dependence can be identified in the presence of consumer heterogeneity of an unknown form. Most importantly, before this inertia can be given a structural interpretation and used in policy experiments such as counterfactual pricing exercises,alternative explanations which might give rise to similar consumer behavior must be ruled out. We develop a ...

Published: Jean-Pierre Dubé & Günter J. Hitsch & Peter E. Rossi, 2010. "State dependence and alternative explanations for consumer inertia," RAND Journal of Economics, RAND Corporation, vol. 41(3), pages 417-445. citation courtesy of

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