Publications

Iyengar, Raghu, Park, Young-Hoon, & Yu, Qi (2022). The Impact of Subscription Programs on Customer Purchases. Journal of Marketing Research, 59(6), 1101–1119.

Subscription programs have become increasingly popular among a wide variety of retailers and marketplace platforms. Subscription programs give members access to a set of exclusive benefits for a fixed fee up front. In this article, the authors examine the causal effect of a subscription program on customer behavior. To account for self-selection and identify the individual-level treatment effects, they combine a difference-in-differences approach with a generalized random forests procedure that matches each member of the subscription program with comparable nonmembers. The authors find that subscription leads to a large increase in customer purchases. The effect of subscription is economically significant, persistent over time, and heterogeneous across customers. Interestingly, only one-third of the effect on customer purchases is due to the economic benefits of the subscription program, and the remaining two-thirds is attributed to the noneconomic effect. Evidence supports that members experience a sunk cost fallacy due to the up-front payment that subscription programs entail. Finally, the authors illustrate how firms can calculate the profitability of a subscription program and discuss the implications for customer retention and subscription programs.

Working Papers and Work in Progress

The Dark Side of Adding a Category: Will Existing Ones “Pay the Price” (with Ron Berman and Eric T. Bradlow)

Does Privatization Lead to Lower Prices: Evidence from the State of Washington’s Liquor Markets (with Ron Berman and Eric T. Bradlow)

An Affine Subspace Shrinkage Approach to Choice-based Conjoint Estimation (with Yupeng Chen and Raghu Iyengar)

Cross-platform Subscription Programs (with Meng Li and Gaoyang Cai)