Date

4-2009

Degree

Bachelor of Science in Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Robert Dominick E. Mariano

Abstract

This study tried to examine factors affecting demand other than price and income. Specifically, it evaluated interpersonal effects in demand such as the bandwagon and the snob effects. The study applied Leibenstein’s (1950) gedanken experiment and employed the fashion market to capture and verify if the said effects exist in the study market. The experiment utilized the market for flipflops as the subject area of demand with 35 respondents. It analyzed how other people’s demands affect an individual’s own demand through a series of experimental rounds. The initial round was basic; it asked how many an individual is willing to buy given different price levels. The subsequent rounds were more complex in the sense that it asked individuals how many they are willing to buy given existing quantities demanded by the market. The study also tried to analyze different socio-demographic factors affecting demand and if the said factors were to affect interpersonal effects. Based on the results, there was a decrease in the market demand over time which indicated the existence of snob effects in the flipflops market. The Friedman test was used to statistically verify this existence and it was statistically proven to exist at low price levels (100, 150, 200, 250 and 500). In the analysis of socio-demographic factors, trends in the demand across age, gender, monthly disposable allowance, and level of social integration were utilized. It was observed that if the respondent was a woman; belonged to the 20 and above age group; or is strongly integrated in society, the respondent is observed to have a higher quantity demanded as compared to those who are not. These findings conform with the hypothesis. However, the results for the monthly disposable allowance contrasted the hypothesis that individuals with higher allowances tend to demand more. The experiment result proved otherwise in this case.

Language

English

Call Number

LG 993.5 2009 E2 B48

Document Type

Thesis

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