Introduction

In a seminal paper, Lancaster (1966) suggested a new approach to consumer theory. His suggestion was based on the idea that the satisfaction derived from the consumption of a good is not due to the good per se, but rather from the characteristics of the good. The hedonic analysis was developed further by, for example, Rosen (1974) and has been employed extensively for various purposes. For example, a hedonic method for estimating people's willingness to pay for a change in the provision of environmental quality characteristics has been used (with varying degrees of success) in environmental economics since the end of the 1960s. The importance of product characteristics for consumers' enjoyment was, however, acknowledged within economic research at an early stage. In an example concerned with automobiles, Court (1939) constructed price indexes that accounted for quality change by following a procedure which he called the hedonic pricing method. A crucial part of the method was the identification of measureable characteristics that relate to automobile quality.

It is interesting to note that a focus on characteristics may offer a procedure to predict the use of new products. Roughly speaking, it may be possible to describe a product which is not yet introduced into the market as a new combination of characteristics that describe already existing products. This possibility is not fruitful for some groups of products. For example, one important reason for buying a mug is probably its look, maybe the presence of a text or a picture on the mug. One or several ‘look characteristics’ that are likely to be related to people's purchase decisions are in such a case not easy to define or to measure.