Article ID: | iaor201041 |
Volume: | 61 |
Issue: | 2 |
Start Page Number: | 284 |
End Page Number: | 293 |
Publication Date: | Feb 2010 |
Journal: | Journal of the Operational Research Society |
Authors: | Baltas G, Saridakis C |
Keywords: | automobile industry |
This paper designs and implements a hedonic model to investigate brand-name effects in the car market. The proposed model provides considerable empirical evidence in support of model-name premia, after controlling for observed product differentiation. Such premia incorporate not only manufacturer equity but also effects that are specific to individual models. The estimated price premia are remarkably intuitive and consistent across carmakers and models. The results yield important implications for brand and range management in the car market and suggest directions for future research.