Identifying the Presence and Cause of Fashion Cycles in Data

Hema Yoganarasimhan

Foster School of Business, University of Washington

March 27, 2015

Fashions and conspicuous consumption play an important role in marketing. In this paper, we present a three-pronged framework to analyze fashion cycles in data – a) algorithmic methods for identifying cycles, b) statistical framework for identifying cycles, and c) methods for examining the drivers of such cycles. In the first module, we identify cycles based on pattern-matching the amplitude and length of cycles observed to a user-specified definition. In the second module, we define the Conditional Monotonicity Property, derive conditions under which a data generating process satisfies it, and demonstrate its role in generating cycles. A key challenge that we face in estimating this model is the presence of endogenous lagged dependent variables, which we address using system GMM estimators. Third, we present methods that exploit the longitudinal and geographic variations in agents’ economic and cultural capital to examine the different theories of fashion. We apply our framework to data on given names, show the presence of large magnitude cycles both algorithmically and statistically, and confirm that the adoption patterns are consistent with Bourdieu’s theory of fashion as a signal of cultural capital.

Number of Pages in PDF File: 44

Keywords: Fashion, Social Influence, Panel Data, Marketing, GMM Estimators

JEL Classification: C33, C52, C32, M31, D71

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Date posted: November 20, 2012 ; Last revised: March 28, 2015

Suggested Citation

Yoganarasimhan, Hema, Identifying the Presence and Cause of Fashion Cycles in Data (March 27, 2015). Available at SSRN: http://ssrn.com/abstract=2178211 or http://dx.doi.org/10.2139/ssrn.2178211

Contact Information

Hema Yoganarasimhan (Contact Author)
Foster School of Business, University of Washington ( email )
474 Paccar Hall
Seattle, WA 98195
United States
HOME PAGE: http://gsm.ucdavis.edu/yoganarasimhan

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