A cohort analysis of household vehicle expenditure in the U.S. and Japan: A possibility of generational marketing
This paper shows the usefulness of cohort analysis for generational marketing. Aggregate data classified by age and period are decomposed into age, period, and generational cohort effects. We compare two cohort-analysis models, the constrained multiple regression model and the Bayesian cohort model. The empirical results that are common to the household vehicle expenditure ratio in the U.S. and Japan are as follows: (1) among a total of three effects, the period effect is the smallest; (2) with the exception of the latest birth cohort, the cohort effect shows a clear upward trend; (3) the age effect decreases in the 20s and 30s, and next increases with a peak detected in the late 50s, and finally decreases. We provide marketing implications for cohort segmentation and forecasting.
KeywordsAge–period–cohort decomposition Bayesian cohort model Constrained multiple regression model Generational marketing Household vehicle expenditure ratio
The author is grateful to the co-editor, Joe Urbany, and three anonymous reviewers for their very useful comments and suggestions. Needless to say, any remaining errors are the author’s.
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