 The differential effects of time and usage on the brand premiums of automobilesEyal Biyalogorsky, Amir Heiman and Eitan Muller International Journal of Research in Marketing, 2022, vol. 39, issue 1, 212-226 Abstract: We investigate how the status and functional benefits of cars’ brands lose value over time. Theoretically, we show that brands with a higher status, or that appeal to status-conscious consumers, exhibit steeper price decline over time. Empirically, we take advantage of the phenomenon of twin cars – pairs of car models that are nearly identical from a structural and mechanical standpoint, but that are sold under differing brand names – to disentangle the effects of physical wear and tear, which should impact both the premium brand and the corresponding standard brand similarly; and time-related price decline, which should affect each brand differently. The main result is that a premium car’s price declines much faster than that of the corresponding standard car (controlling for physical condition, mileage, and initial price). This result suggests that status declines faster than do functional attributes, and status seekers tend to replace their cars earlier. Keywords: Price decline; Status; Twin cars (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ijrema:v:39:y:2022:i:1:p:212-226 DOI: 10.1016/j.ijresmar.2021.06.007 Access Statistics for this article International Journal of Research in Marketing is currently edited by Roland Rust More articles in International Journal of Research in Marketing from Elsevier |
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