Measuring brand equity in the car market: a hedonic price analysis

Abstract

This paper designs and implements a hedonic model to investigate brand-name effects in the car market. The proposed model provides considerable empirical evidence in support of model-name premia, after controlling for observed product differentiation. Such premia incorporate not only manufacturer equity but also effects that are specific to individual models. The estimated price premia are remarkably intuitive and consistent across carmakers and models. The results yield important implications for brand and range management in the car market and suggest directions for future research.

Keywords:

• car market
• brand equity
• price premium
• marketing

Acknowledgements

We thank the editorial team of the Greek edition of Top Gear, two anonymous JORS reviewers and several professionals in this field for their valuable suggestions. The views expressed are those of the authors, who are also responsible for any errors.