The Effects of Congestion and Skills at a Hair Salon on the Consumer's Revisiting Behavior

Author Name KONISHI Yoko  (JSPS Postdoctoral Fellowships for Research Abroad, Yale University / Fellow, RIETI)
Creation Date/NO. October 2010 10-E-046
Research Project Micro Econometric Analysis of Performance in the Service Industry
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In this study, we apply duration analysis to specify a model of customers’ behavior regarding their visits to a hair salon and we then estimate their aggregated revisit rates / dates. We adopt the following approach: [1] assuming that there are differences among first time customers, regular and loyal customers with respect to the intensity function; [2] introducing customers’ behavioral variables, hair salon congestion and hairdresser skill variables, in addition to demographic variables; [3] by applying the estimation results of Cox regression, we examine the aggregated revisit rate and show how we measure the individual next revisit date. As a result, we found that the intensity functions of non-loyal and loyal customers have been specified by different models. We could observe differences between first time customers and loyal customers in terms of the response toward hair salon and hairdresser congestion. We could also find that loyal customers tend to prefer higher skilled hairdressers. It suggests that customer heterogeneity should be included in the intensity model and that we also need the hair salon’s information (supply side) to specify customers’ revisit model.