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What is Preference Regression?

The term preference regression refers to an apparent decline in the actual and perceived quality of almost any product or service for which such perception leads to a subsequent reduction in demand or even preference. The term implies certain cases like changes that occur due to reason leading to change in preferences, natural deterioration, packaged commodities, etc., when a product loses its appeal over time, resulting in reduced consumption levels and revaluation for such products.

What is the Purpose of Preference Regression?

Preference regression is usually used to identify the causes of the decrease in consumer demand and preference levels for products. It can also be referred to as a multivariate analysis technique that is used to understand the factors and their subsequent impact on demand patterns and value perception over time. In most cases, it is referred to assess various aspects such as durability, credibility, etc., of individual products or services and arrive at an appropriate strategy that best suits them.

How Can Preference Regression Help You

To illustrate, consider the following situations where Preference Regression would come into play: An example could be when a specific brand has witnessed diminishing sales figures over time due to lower product quality, increase in competition, etc. A study of such a scenario can be carried out to evaluate the factors that have caused these sales volumes to drop and analyze their impact on customer preference levels. In such cases, Preference Regression can provide insights into what steps should be taken to avoid further losses and help identify appropriate strategies to improve sales figures.

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