Estimating reference prices was necessary to test
the proposed hypotheses. Earlier research,
incorporating fi ve different estimates of price
reference, was carried out to determine the best
way to do this ( Table 3 ).
Our results 26 indicate that the best approach to
reference prices is based on prices observed at the
time of purchase, that is, the arithmetic average of
the highest and lowest market price for the
category of products purchased. This estimate is
the basis for calculating losses and gains included
in the choice models proposed below. The
following model is proposed for checking the
effect of prices, losses and gains on the likelihood
of making a particular brand choice: