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Dr. Milkie's research helps to reshape cultural frames regarding maternal time and children's well being

Verna M. Keith, Professor, Department of Sociology, Texas A & M University

Mortensen study examines recession effects on health delivery

Faculty Associate John Robinson tracks trends from 1965 to 2010

Kasey Buckles, Assistant Professor, Department of Economics, University of Notre Dame

Shelley Clark, Associate Professor, Department of Sociology, McGill University

Christine Bachrach, University of Maryland and Duke University; 2012-011

Michael S. Rendall, University of Maryland; Elizabeth H. Baker and Margaret M. Weden, RAND Corporation; 2012-010

We study how consumers make brand choices when they have limited information. In a market of experience goods with frequent product entry and exit, consumers face two types of information problems: first, they have limited information about a product’s existence; second, even if they know a product exists, they do not have full information about its quality until they purchase and consume it. In this chapter, we incorporate purchase experience and brand advertising as two sources of information and examine how consumers use them in a dynamic process. The model is estimated using the Nielsen Homescan data in Los Angeles, which consist of grocery shopping history for 1,402 households over 6 years. Taking ready-to-eat cereal as an example, we find that consumers learn about new products quickly and form strong habits. More specifically, advertising has a significant effect in informing consumers of a product’s existence and signaling product quality. However, advertising’s prestige effect is not significant. We also find that incorporating limited information about a product’s existence leads to larger estimates of the price elasticity. Based on the structural estimates, we simulate consumer choices under three counterfactual experiments to evaluate brand marketing strategies and a policy on banning children-oriented cereal advertising. Simulation suggests that the advertising ban encourages consumers to consume less sugar and more fiber, but their expenditures are also higher because they switch to family and adult brands, which are more expensive.

Dr. Shinogle was killed in an automobile accident on 20 May