Measuring Brand-name Effects in the Markets for Consumer Electronics and Appliances
In this paper we estimate brand-name effects for 9 types of products based on the approach used by Holbrook (1992) and Bello and Holbrook (1995). Following their idea, in hedonic price regressions we control not only for important product features that are typically included in product description, but also for the quality ratings that were measured in Consumer Union’s laboratories, as well as for brand-name dummies. Even though the original research suggested that brand-name effects on price had been wiped out from most markets, we have found them to be statistically significant for 7 product subcategories out of 9. This generally supports the idea that brands play an important role in pricing despite the development of various web services allowing consumers to compare product features and prices easily. A possible measure of the intensity of brand-name effects on pricing is suggested. Some directions for further research and empirical generalizations are outlined.