| By: |
Lundberg, Johan (Department of Economics, Umeå University);
Lundberg, Sofia (Department of Economics, Umeå University) |
| Abstract: |
From economic theory, it is known that consumer loyalty schemes can have
lock-in effects resulting in entry barriers and higher prices. This paper
concerns consumer loyalty schemes where the main issue is to test the
hypothesis that loyalty scheme membership affects the choice of food retailer.
This choice is modeled as a random utility maximization problem estimated with
maximum likelihood. Based on a data set covering 1,551 Swedish households, we
find evidence supporting this hypothesis. Further, according to the results,
store characteristics and geographical distance matter for the choice of
retailer while household characteristics are not found to have a significant
effect. |
| Keywords: |
Bonus card; Conditional logit; Consumer choice; Distance; Food retailer; Loyalty scheme |
| JEL: |
D12 L49 L66 L81 R10 |
| Date: |
2010–02–09 |
| URL: |
http://d.repec.org/n?u=RePEc:hhs:umnees:0801&r=dcm |