A Joint Examination of Quality Choice and Satisfaction: The Impact of Circumstantial Variables

Abstract

Using data from an online hotel reservation site, the authors jointly examine consumers’ quality choice decision at the time of purchase and subsequent satisfaction with the hotel stay. They identify three circumstantial variables at the time of purchase that are likely to influence both the choice decisions and the postpurchase satisfaction: the time gap between purchase and consumption, distance between purchase and consumption, and time of purchase (business/nonbusiness hours). The authors incorporate these three circumstantial variables into a formal two-stage economic model and find that consumers who travel farther and make reservations during business hours are more likely to select higher-quality hotels but are less satisfied. Consumers who book earlier are more likely to select higher-quality hotels and are more satisfied. The findings suggest that incorporating circumstantial variables into formal choice models is useful in helping managers understand and predict consumer choices and satisfaction assessments.