Effect of Price on the Demand for Durables: Modeling, Estimation, and Findings.
The focus of this article is on the effect of price on the adoption of durables. Most empirical research on the timing of adoption of new products has centered on the growth without explicitly incorporating any marketing-mix variables. Recently, some researchers have pursued ways of enriching the Bass model by including such controllable variables as price and advertising. Our interest in this article is to propose diffusion models that incorporate price. We use these models to study the price effect for four durable products. We report the estimation results and discuss the insights they provide. In particular, our empirical results suggest that price influences consumers' decisions on whether or not to buy and the diffusion process governs the timing of purchase given the decision to buy. Moreover, we find that the estimated coefficient of imitation in the Bass model is understated if price is inappropriately modeled.
Year of publication: |
1990
|
---|---|
Authors: | Jain, Dipak C ; Rao, Ram C |
Published in: |
Journal of Business & Economic Statistics. - American Statistical Association. - Vol. 8.1990, 2, p. 163-70
|
Publisher: |
American Statistical Association |
Saved in:
Saved in favorites
Similar items by person
-
Why Are Royalty Rates Higher in Service-Type Franchises?
Rao, Ram C, (1995)
-
Why are some modes of acquisition more profitable? A study of the credit card industry
Steffes, Erin M, (2011)
-
Dynamic Monopoly Pricing under a Poisson-Type Uncertain Demand.
Chen, Yu-Min, (1992)
- More ...