| This paper analyzes survey data to determine the factors that impact the probability of purchasing a domestic versus foreign brand of automobile. It includes dynamic variables reflecting purchase history and thus the effect past choices may have on current behavior. Some of these factors are shown to be statistically significant. The paper also looks at key subpopulations. We see that preferences in the luxury segment are far better explained by economic, demographic, and dynamic variables than are preferences in the non-luxury market. The paper also looks at switching behavior---domestic owners who switch to foreign brands. The key finding is that loyalty to domestic brands is more a product of economic variables such as price and income, and of car attributes such as size, than it is a product of habit persistence or structural state dependence. |
