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

40 Pages Posted: 18 Oct 2013

See all articles by Soren Anderson

Soren Anderson

Michigan State University - Department of Economics; Michigan State University - Department of Agricultural Economics; National Bureau of Economic Research

Ryan Kellogg

University of Michigan at Ann Arbor

Ashley Langer

University of Arizona

James Sallee

University of Michigan at Ann Arbor

Date Written: October 2013

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.

Suggested Citation

Anderson, Soren T. and Kellogg, Ryan and Langer, Ashley and Sallee, James, The Intergenerational Transmission of Automobile Brand Preferences: Empirical Evidence and Implications for Firm Strategy (October 2013). NBER Working Paper No. w19535. Available at SSRN: https://ssrn.com/abstract=2342015

Soren T. Anderson (Contact Author)

Michigan State University - Department of Economics ( email )

East Lansing, MI 48824
United States

Michigan State University - Department of Agricultural Economics ( email )

East Lansing, MI 48824
United States

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Ryan Kellogg

University of Michigan at Ann Arbor ( email )

500 S. State Street
Ann Arbor, MI 48109
United States

Ashley Langer

University of Arizona ( email )

James Sallee

University of Michigan at Ann Arbor ( email )

500 S. State Street
Ann Arbor, MI 48109
United States

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