Markets that cater to migrants, whether from a different part of the
country or from far-flung corners of the globe, are not just great for
gourmands. They are also testament to the fact that people often retain
very strong preferences for the kinds of food they grew up eating.
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Such nostalgia is the most obvious example of the influence exerted by
loyalty to the brands of your youth. A new study by economists from the
universities of Tilburg and Chicago*
tracks the consumption patterns of American households over two years
and finds striking evidence that such loyalty is widespread, deep and
long-lasting.
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If this is generally true, it has important implications. For one thing,
the benefits of being the first brand into a market could last longer
than might be assumed.
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To the extent that such preferences persist, people will benefit less
from the increased variety of goods and altered relative prices that
trade brings about than they would do if habits were not a significant
determinant of consumption.
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