A quick-and-easy method for estimating switching costs

I develop and test a method for a quick-and-easy calculation of consumer sw itching costs among brands in a given industry. The theory developed and te sted here maps observed brands' prices and market shares onto the switching costs which deter a consumer of a specific brand from switching to any oth er competing brand. Then, I demonstrate how users' switching costs can be d irectly calculated in two different industries: (a) the Israeli cellular ph one market, and (b) the Finnish market for bank deposits. This calculation method can be used to calculate switching costs in a wide variety of other industries, such as airlines, health services, computers, software, telecom munications, and more. (C) 2002 Elsevier Science B.V. All rights reserved.