Quantifying Brand Loyalty: Evidence from the Cigarette Market

Philip DeCicca, Donald Kenkel, Feng Liu and Jason Somerville
Authors registered in the RePEc Author Service: Philip DeCicca

No 28690, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We exploit a quasi-experiment created when New York State began in 2011 to tax cigarettes sold on Native American Reservations. The regime change represents a unique opportunity to quantify brand loyalty because it almost doubled the price of premium-brand cigarettes, while Native brands were still untaxed. We use data from two different sources—the New York State Adult Tobacco Survey and the Nielsen Homescan Panel. We find that the increase in relative prices led to substantial declines in premium cigarette purchases. However, even among the premium consumers with the most to gain from switching, about three-quarters remained brand loyal.

JEL-codes: I12 (search for similar items in EconPapers)
Date: 2021-04
New Economics Papers: this item is included in nep-com and nep-ipr
Note: EH
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published as DeCicca, Philip & Kenkel, Donald & Liu, Feng & Somerville, Jason, 2021. "Quantifying brand loyalty: Evidence from the cigarette market," Journal of Health Economics, Elsevier, vol. 79(C).

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Journal Article: Quantifying brand loyalty: Evidence from the cigarette market (2021)
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