Tuesday, August 12, 2014
The Impact of Service Bundling on Consumer Switching Behaviour: Evidence from UK Communication Markets
Tim Burnett, University of Bristol analyzes The Impact of Service Bundling on Consumer Switching Behaviour: Evidence from UK Communication Markets.
ABSTRACT: This paper empirically analyses the impact of the bundling of four common home communication services with a single supplier on the probability that an individual changes supplier using a survey-elicited dataset of 2,871 individuals. Implementing a random effects probit approach to control for individual heterogeneity, the results strongly show that when individuals bundle their service then they are significantly less likely to change supplier. A second result indicates that service- and supplier- related variables are better predictors of an individual's likelihood of switching than are the characteristics of the individual, suggesting that future research in this area should prioritise their inclusion.