Price-Quality Relations and Hedonic Price Indexes for Cars in the United Kingdom

The main objective of this paper is to employ a complete set of panel data on UK car characteristics to estimate a hedonic car price model. This enables us to examine price differences between various car models in terms of variations in individual car characteristics.We also pay greater attention to the specification of the hedonic price model than previous studies, as shown by the wide range of diagnostics reported. A second objective of the paper is to utilise the estimates of the hedonic price model to construct a hedonic price index for cars, which allows us to investigate the increase of car prices due to quality and non-quality factors.     

Using a hedonic price model to test prospect theory assertions: The asymmetrical and nonlinear effect of reliability on used car prices

This paper investigates prospect theory implications in used goods markets. In particular, it develops a hedonic price model that addresses the price structure of the used car market in the light of prospect theory. The proposed hedonic price model provides empirical evidence in support of prospect theory predictions for explaining used car prices after controlling for observed product differentiation. It is demonstrated that consumers are risk seeking when used car reliability is below the expected reference value and risk averse when used car reliability is above the expected reference value. The model also illustrates how car quality affects residual values and how buyers evaluate used cars.     

The market valuation of ethical assets in Spain: an application of the hedonic pricing method

The aim of this paper is to calculate the market valuation of non‐financial characteristics, namely, the social responsibility criteria (social, ethical and environmental) included in the Spanish Socially Responsible Investment Funds. The hedonic price method is applied for this purpose. This method relates the price of Socially Responsible Investment Funds with both financial and social responsibility characteristics. Because of the large number of social responsibility characteristics included in these funds, prior to application of the hedonic price method, the principal components factor analysis technique is used. The data are taken from the prospectus for each fund and from the data provided by the National Securities Market Commission. Results indicate that the Spanish market is sensitive to the social responsibility practices of companies. In particular, the market value practices related to environmental sustainability, the enforcement of labour rights, sustainable production and consumption and non‐abusive market practices.     

Hedonic theory,marketing research,and the analysis of complex goods

It is argued that marketing people may benefit from adopting the hedonic methodology used by economists, especially when analysing price/quality relationships, but also in order to make better evaluations of differentiated products. Hence the paper introduces the theoretical and empirical aspects of hedonic analysis and gives some suggestions for the improvement of the econometric analysis of price/quality relationships. In addition, the application of the hedonic methodology is shown on a sample of 528 Danish house transactions, and the advantages of hedonic analysis are demonstrated.     

Is it all about consumer engagement? Explaining continuance intention for utilitarian and hedonic service consumption

This paper compares the explanatory power of consumer engagement (CE) regarding service continuance intention with the variables of attitude (utilitarian and hedonic) and satisfaction. Survey data were collected from users of mobile music (n = 596) and mobile parking (n = 297) services. The partial least squares method was applied to analyze the data. In line with expectations, the findings show that attitude and satisfaction are superior drivers of service continuance intention compared to CE when service is used for utilitarian reasons. In contrast, when service consumption is driven by hedonic reasons, CE is a stronger driver than satisfaction. However, no evidence for the superiority of CE over attitude was found in the hedonic context.     

Shopping is truly a joy

Some groups of consumers derive great pleasure from shopping; we refer to this as hedonic shopping value. This study contributes to the current literature by establishing construct equivalence in a cross-culture study and testing the relationship of positive and negative price cues with hedonic shopping value. We investigated this concept using confirmatory factor analysis to test equivalence between the two cultures on six dimensions of price and hedonism. Results indicate that the two-group path equality provided acceptable results (chi-square?=?203.92 with 217 df, p?=?0.73; GFI?=?0.94). This indicated that the six dimensions of the price construct and hedonic shopping values are the same for the two countries. Therefore, we proceeded to test the hypotheses. As expected, neither of the two positive dimensions of price was significantly related to hedonic shopping value. Two of the four negative price cues, price mavenism and value consciousness, were positively related to hedonic shopping value.     

Design for synergy with brand or price information

Customers' preference for the hedonic benefits (e.g., aesthetics) and utilitarian benefits (e.g., functionality) offered by a product varies depending on the context—buying versus selling, and choice versus willingness‐to‐pay. However, a customer's preference formation could involve brand information or price information in addition to the benefits offered by the product. It is unclear how the consideration of brand or price information influences customers' relative preference for hedonic and utilitarian product benefits. Does this information alter preference in favor of a product that offers greater utilitarian or greater hedonic benefits, and why? The results show that (1) hedonic (utilitarian) attributes have a significantly stronger influence on consumer preference when accompanied by a strong (weak) versus a weak (strong) brand; and (2) in the presence of price information, hedonic attributes have a dominant influence on consumer preference compared to in the absence of price information. The article concludes with a discussion of the theoretical contributions and managerial implications of design for synergy with brand or price information. © 2010 Wiley Periodicals, Inc.     

Impacts of product type and representation type on the perception of justice and price fairness

Consumers make purchasing decisions every day. This paper investigates perceptions of justice and price unfairness, where the product (hedonic vs. utilitarian) is presented either in a more abstract (verbal) or a more concrete (photo) way in a context of discriminatory pricing—a widely-employed marketing practice. Two experimental studies were completed. Results show an interaction between product and representation types. When consumers pay more than others to purchase utilitarian products that are concretely represented, participants perceive more unfairness when compared to hedonic products. However, when consumers pay more than others to purchase utilitarian products abstractly represented, the perception of unfairness decreased compared to hedonic products. For consumers and practitioners, this study offers important contributions—it presents situations in which a discriminatory price can result in a different perception of injustice or price unfairness to informed consumers. Accordingly, implications of these findings for the literature, consumers, and managers are discussed.     

Money,mavens, time,and price search: Modelling the joint creation of utilitarian and hedonic value in grocery shopping

Abstract

This research deductively develops a model of both in-store price search and store deal proneness drawing on hedonic and utilitarian value creation. Based on a sample of 535 US grocery shoppers, the model reveals that in-store price search and store deal proneness share many of the same drivers, amongst these, the value of time being the most important. The opportunity cost of time engaged in price search is explained in terms of shoppers’ financial pressures and role construction as price mavens. Price mavenism influences store deal proneness directly due to its capacity to yield the price information required to build and maintain a role identity, and indirectly through its effect on the opportunity cost of time engaged in price search. The primary implication of the research is that the relationship between time, search, and price mavenism may be best explored by viewing price knowledge, the basis for identity maintenance, as a flow rather than a stock.     

Untangling the relationships between consumer characteristics,shopping values,and behavioral intention in online group buying

This study examines the link among consumer characteristics (price-sensitive behavior, variety-seeking behavior, and compulsive buying behavior), shopping values (utilitarian and hedonic shopping values), and behavioral intention in online group buying (OGB). This study tests usable responses collected by means of mall-intercept systematic sampling from consumers who previously participated in OGB. Structural equation modeling was used to analyze data and test the hypothesized relationships. Findings suggest that price-sensitive and variety-seeking behaviors are significantly related to utilitarian shopping value, whereas price-sensitive, variety-seeking, and compulsive buying behaviors are significantly related to hedonic shopping value. Both utilitarian and hedonic shopping values significantly influence consumers’ OGB intentions. For a successful OGB strategy, Internet marketers and site operators should emphasize the utilitarian shopping value of price saving and selection and introduce the hedonic shopping values of promotions and sensory experiences. This study provides a link between two streams of prior research – that is, consumer characteristics and shopping values. Furthermore, it validates an empirical model whose results can help business practitioners make better-informed marketing management decisions for OGB and help academics and consumers better understand OGB behavior.     

Which Products are More Responsive to In-Store Displays: Utilitarian or Hedonic?

In-store displays aim to boost sales of both utilitarian and hedonic products. Noting typical differences in the information processing and purchase behavior evoked by these product types, and building on congruency theory principles, the authors propose that different types of in-store displays (i.e., island, end-of-aisle, or shelf signage) are more appropriate for utilitarian versus hedonic products, and the use of price or product promotions might reinforce these effects. With a database that combines three data sources (scanner, observational, and survey), this article presents an analysis of a market share model at the SKU level. The results confirm that in-store displays have differential effects on sales, depending on their characteristics; congruency between the decision-making process of utilitarian versus hedonic products and the characteristics of in-store display types moderates their effectiveness in terms of SKU sales. Shelf signage strongly increases the sales of utilitarian products, whereas island and end-of-aisle displays increase sales of hedonic product categories more effectively. The use of congruent promotions creates synergistic influences that reinforce these effects. In particular, price promotions improve the impact of shelf signage on utilitarian products, and product promotions strengthen the impacts of island and end-of-aisle displays on hedonic products. These results extend prior research on in-store marketing actions and the nature of utilitarian versus hedonic products, as well as providing recommendations for retailers and manufacturers seeking to optimize their retail space and commercial budgets.     

Work and Fun on the Internet: The Effects of Utilitarianism and Hedonism Online

Consumers may act on the spur of the moment, driven by fun and curiosity, or be goal-oriented, task-focused utilitarians. This study investigates the effects of consumers’ hedonic and utilitarian orientation online on price consciousness, frequency of purchase, purchased amount, intention to re-patronize a Web site and expertise with the Internet. It specifically considers purchasing, not mere browsing, basing on data collected on customers of one of the largest Italian online retailers for electronics. The data show significant differences between hedonic and utilitarian orientation online with regard to past purchase frequency, the amount purchased and the intention to re-patronize the Web site in the future. The findings suggest that utilitarianism is strongly present online, and is valuable, thus utilitarian consumers should not be neglected, but hedonism is even more profitable, impacting on the number of items purchased and the intention to come back to the Web site. No differences are found in the level of price consciousness or in the degree of expertise with the Internet.     

Do market prices correspond with consumer demands? Combining market valuation and consumer utility for extra virgin olive oil quality attributes in a traditional producing country

The objective of this research is to examine whether there is a relationship between the value of attributes based on the market price and on consumer utilities. To address this objective, the results from a hedonic price (HP) approach are combined with the actual consumer utilities from a real choice experiment (RCE) for extra virgin olive oil (EVOO) attributes. The results indicate that the origin of production attribute positively influences consumer utility and it is also positively related to market EVOO prices. Conversely, the PDO quality certification positively influences consumer utility and willingness to pay, although it is not related to EVOO prices in the real market.     

Convenience stores in the digital age: A focus on the customer experience and revisit intentions

The digital age has posed challenges to the convenience store (c-store) industry regarding the types of technology investment required to compete in the digital world, and the c-store industry has experienced years of customer count declines. This research empirically examines what store stimuli are important to c-store consumers and how these factors affect the customer experience, satisfaction, and revisit intentions. The data were collected from 502 c-store consumers, and the covariance-based structural equation modeling technique was used to test the hypothesized associations. We found that hedonic customer experience mediates the association between store image, price, service quality, omnichannel, and customer satisfaction. Utilitarian customer experience mediates the association between store image, product assortment, price, and customer satisfaction. In addition, customer satisfaction has a positive effect on the revisit intentions. The findings of the research contribute to the theory building of customer experience of convenience stores. This research reveals that emphasizing hedonic experiences could be the answer to reversing the declining consumer trips in the convenience store industry. Theoretical and practical implications are discussed.     

Measuring alternative asset prices in an emerging market: The case of the South African art market

Investments in alternative assets, such as art, are influenced by indices that measure price movements in these assets. This paper uses the South African art market to consider how different methodologies influence price estimates in a setting where repeated sales of the same artworks are limited. The focus is on estimating art prices in South Africa, based on a comprehensive database of South African art auctions. A new pseudo-repeat sales method is proposed, to overcome data limitations facing conventional hedonic and repeat sales methods. While the methods suggest similar trends in South African art prices, the levels and volatilities of the returns vary widely, depending on the method used to estimate the price index. The paper also introduces a test for price bubbles that accounts for the measurement error associated with constructed art price indices. Unlike indices based on central tendency methods, regression-based methods indicate mildly explosive prices for oil and watercolour art in South Africa, in the run-up to the global financial crisis. The new test suggests similar conclusions, but indicates shorter periods of explosive price behaviour.     

住宅特征价格指数编制现状的国内外比较分析

住宅价格指数是反映房地产市场价格变动趋势的重要指标,特征价格法作为住房价格指数的编制方法之一已被国外普遍使用。在阅览大量文献和国外相关资料的基础上,对目前国际上编制住宅价格指数的三种主流方法进行归纳总结,并对我国三大住房价格指数的编制现状进行比较评析,提出关于完善我国住宅价格指数的构想:构建以国家统计局为编制主体,传统加权综合指数和特征价格指数并行发展的住宅价格指数体系。     

Understanding on-the-go consumption: Identifying and quantifying its determinants

Although the amount of food and beverages consumed on-the-go has been increasing, existing research has not sufficiently examined this behavior. This study uses a mixed methods design with a qualitative study to identify four determinants of on-the-go consumption: time pressure, price consciousness, health orientation, and enjoyment. Combining the qualitative results with Behavioral Decision Theory, eight hypotheses are derived about the influence of the four determinants as well as their interrelations. Hypotheses testing and predictive validity assessment are based on two large-scale consumer samples, one main study and one validation study. The results confirm a significant influence of utilitarian determinants (time pressure and price consciousness), though they are less important than the hedonic determinant. Implications for retail managers are presented, as these results challenge conventional practices. Moreover, existing theory is extended beyond a distinction between utilitarian and hedonic motives by regarding health orientation as a hybrid determinant of on-the-go consumption.     

Shopping value in online auctions: Their antecedents and outcomes

Online auctions present unique characteristics in the consumer decision-making process that raise new issues related to consumer shopping behaviors in auction-based purchases. The present research examined the relationship between consumer characteristics (i.e., compulsive buying behavior, variety-seeking tendency, and price sensitivity) and shopping value (i.e., utilitarian and hedonic) in online auctions and found that both compulsive buying behavior and variety-seeking tendency are critical factors of shopping value in the online auction environment. There were no positive relationships between price sensitivity and shopping value. The results of this study also revealed that consumers’ shopping value positively influenced their preference, which, in turn, formed behavioral intentions in online auctions. While utilitarian value was found to be a significant predictor of behavioral intentions, hedonic value was not. However, hedonic value influenced intentions indirectly through preference.     

The Value to Consumers of Health Labeling Statements on Breakfast Foods and Cereals

Food manufacturers have an incentive to include nutrient content claims, health claims, or other types of labeling statements on foods if they believe that consumers will be willing to pay more for products with specific attributes. We estimated semi-log hedonic price regressions for five breakfast bar and cereal product categories using Nielsen Scantrack scanner data for 2004 and found that labeling statements for these foods are often associated with substantially higher prices, reflecting higher implicit value to consumers. The largest effects were associated with “carb-conscious” carbohydrate labeling (reflecting the time period of the data), followed by fat and sugar content labeling statements.     

Application of hedonic price modeling to consumer packaged goods using store scanner data

This paper contributes to the marketing research literature by proposing an application of hedonic modeling to consumer packaged goods using store scanner data. While other studies have applied hedonic price modeling to CPG, the interpretation of their results might have been flawed. This paper, by proposing an extension of the traditional approach to account for sales quantity, makes the hedonic modeling results based on CPG scanner data acquire their intended interpretation. Hedonic modeling provides an additional alternative in the toolkit of the applied marketing researcher to assist revealing markets' relative preferences. To illustrate the use of hedonic modeling in CPG, the paper focuses on Premium Carbonated Soft Drinks. It uses a full year of weekly store scanner data from grocery stores sampled across the U.S.