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Retailer Choice and Loyalty Schemes - Evidence from Sweden

Johan Lundberg and Sofia Lundberg ()

No 801, Umeå Economic Studies from Umeå University, Department of Economics

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 (search for similar items in EconPapers)
JEL-codes: D12 L49 L66 L81 R10 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2010-02-09
New Economics Papers: this item is included in nep-agr, nep-com, nep-dcm, nep-mkt and nep-ure
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Related works:
Journal Article: Retailer choice and loyalty schemes—evidence from Sweden (2010) Downloads
Working Paper: Retailer Choice and Loyalty Schemes - Evidence from Sweden (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:umnees:0801

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