Brian T. Ratchford

An Empirical Test of a Model of External Search for Automobiles

A structural equations model of the determinants of external search for automobiles is developed and tested on survey data from recent automobile purchasers. By considering how perceived risk and perceived benefits affect search, by specifying the role of experience and knowledge in the search process more precisely than in other field studies of search, and by modeling the interrelationship between the various determinants of search, the authors attempt to provide new insights into the determinants of search behavior for automobiles and other consumer durables. Copyright 1991 by the University of Chicago.

The Impact of the Internet on Information Search for Automobiles

Using data from surveys of automobile buyers collected in 1990 and 2000 in a natural experiment setting, the authors study the determinants of use of the Internet as a source of information on automobiles, its impact on the use of other sources, and its impact on total search effort. The results indicate that the Internet draws attention in approximately the same proportion from other sources. The results also show that those who use the Internet to search for automobiles are younger and more educated and search more in general. However, the analysis also indicates that they would have searched even more if the Internet had not been present.

Can Price Dispersion in Online Markets Be Explained by Differences in E-Tailer Service Quality?

It has been hypothesized that the online medium and the Internet lower search costs and that electronic markets are more competitive than conventional markets. This suggests that price dispersion of an item with the same measured characteristics across sellers at a given point in time for identical products sold by e-tailers online should be smaller than it is offline, but some recent empirical evidence reveals the opposite. Based on an empirical analysis of 105 e-tailers comprising 6.739 price observations for 581 items in eight product categories, the authors show that online price dispersion is persistent, even after controlling for e-tailer heterogeneity. The general conclusion is that the proportion of the price dispersion explained by e-tailer characteristics is small. Also, after controlling for differences in e-tailer service quality, prices at pure-play e-tailers are equal to or lower than those at bricks-and-clicks e-tailers for all categories except books and computer software.

The Economics of Consumer Knowledge

While approaches to measuring the state of a consumers knowledge are well developed, much less is known about the relationship between knowledge and consumer choice and information search. The purpose of this article is to explore these relationships by treating consumer knowledge as human capital, which affects the full price of consumption and search activities. Using this framework, models are presented to explain life cycle consumption patterns, lifestyles, brand loyalty, choice of features, and search behavior. This economic perspective is compared and contrasted to other consumer research on these topics, including recent qualitative research that examines consumption behavior. Copyright 2001 by the University of Chicago.

A model of search behavior with an application to grocery shopping

Abstract This study proposes and empirically tests a dynamic model of consumer information search behavior for groceries, which incorporates human capital. By building a formal model that demonstrates interactions between the determinants of search, we are able to distinguish between different types of human capital, and to provide insight into the measurement of each type. We test this model employing survey data on consumer perceptions of the various variables in our model in the domain of grocery shopping. In general, we find that self-reported search for information about buying groceries is related to perceptions of the benefits and costs of search in a manner predicted by our theory.

The New Economic Theory of Consumer Behavior: An Interpretive Essay

This paper attempts to summarize and integrate some recent economic theories of consumer behavior based on demand for underlying characteristics of goods. The implications of these theories for research in consumer behavior are discussed, and an attempt is made to compare and integrate these theories with recent developments in multi-attribute scaling and attitude models.

Measuring Market Efficiency and Welfare Loss

This study presents a general methodology capable of addressing a number of fundamental questions in consumer policy. Are consumers paying more than the minimum price for a given bundle of attributes? If so, what brands cost more than the consumer needs to pay? What would be the degree of improvement in the consumers well being if some intervention sets the price of such inefficient brands at the efficient level? We apply the methodology to data on automobiles and several other goods and analyze the determinants of efficiency.

Price Competition Between Pure Play vs. Bricks-and-Clicks e-Tailers: Analytical Model and Empirical Analysis

In this paper, we first develop a game theoretic model of price competition between a pure play e-tailer and a bricks-and-clicks e-tailer. We show that in general, the pure play e-tailer has a lower equilibrium price. We then develop a simultaneous equation model of e-tailer price and traffic and estimate this model using data collected from 905 e-tailers across eight product categories. The empirical results show that after controlling for the effects of other variables, prices at pure play e-tailers are generally lower. E-tailers with high traffic do not always command higher prices. E-tailers with high level of reliability, shopping convenience, and deep information, generally do not generate high web traffic and do not enjoy high prices. However, trust enhances e-tailer traffic and early online entry is associated with both high e-tailer traffic and high prices.

Estimating Demand Functions for Product Characteristics: The Case of Automobiles

This paper illustrates how the Rosen (1974) model of consumer choice can be used to estimate demand and supply functions for product characteristics; in this case, for six characteristics of automobiles. We also show how the demand functions for characteristics can be used to recover consumer preference functions.

Has the productivity of retail food stores really declined

Abstract Despite the fact that other factors of production have been substituted for labor, and that scanner technology has come into widespread use, the BLS index of labor productivity for retail food stores has been declining for sometime. The purpose of this paper is to study this puzzling decline in measured productivity. The results indicate that the decline in the BLS index is due to changes in services offered by retail food stores that are not incorporated into the index, and that productivity increased if these services are accounted for.