Abstract: Using hierarchical linear model, this paper investigates the characteristics of Chinese customer’s price tolerance. The subjects were 26384 customers who had bought and used the products in the particular time of periods. The results shows that there was significant variation of the customer’s price tolerance on different products, and the effect of customer’s age and education level on price tolerance was negative, the price tolerance of male customers were much more than the female customers.

Key words: price tolerance, demographic variable, hierarchical linear model