Using data from pre- and post-hurricane purchasing of consumer-packaged goods (CPG), new research has found that while consumers may switch brands in the lead-up to a natural disaster, they will likely switch back to their previously purchased brands when the crisis has passed. This has implications for the extent to which companies can expect to capture consumers using temporary price promotions.
, is called"Identifying State Dependence in Brand Choice: Evidence from Hurricanes." The authors of the study are Julia Levine of Johns Hopkins Carey Business School, and Stephan Seiler of Imperial College.
State dependence refers to the causal effect of past choices or circumstances on current outcomes. This can be thought of as a form of inertia—you might repurchase the same brand not because you like it more than other brands, but simply because you purchased it last time. Choice persistence is observed in many contexts, but in some situations, such as when you are stocking up on essentials for a possible hurricane, you might have no choice but to switch to any available brand.
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