To Lease or to Buy? A Structural Model of a Consumer's Vehicle and Contract Choice Decisions
| Autor: | Jorge Silva-Risso, S. Siddarth, Srabana Dasgupta |
|---|---|
| Rok vydání: | 2007 |
| Předmět: |
Marketing
Finance Economics and Econometrics business.industry Total cost media_common.quotation_subject 05 social sciences Durable good Product differentiation Payment 050105 experimental psychology Interest rate Microeconomics Incentive Lease Cash 0502 economics and business 050211 marketing 0501 psychology and cognitive sciences Business Business and International Management media_common |
| Zdroj: | Journal of Marketing Research. 44:490-502 |
| ISSN: | 1547-7193 0022-2437 |
| DOI: | 10.1509/jmkr.44.3.490 |
| Popis: | By treating leasing and financing contracts as differentiated products with their own unique acquisition costs, the authors develop a structural model of a consumer's choice of automobile and the related decision of whether to lease or buy it. They estimate the model on a data set of new car purchases from the entry-luxury segment of the U.S. automobile market. A key finding is that consumers are myopic and prefer contracts with lower payment streams even when they have higher total costs. The authors also find that consumers are more likely to lease than to finance cars with higher maintenance costs because this provides them with the option to return the car before maintenance costs become too high. The authors demonstrate how automobile manufacturers can use the model to evaluate the effectiveness of promotional incentives, such as cash rebates, interest rate subsidies, and increased residual values. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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