Behavioral research has documented the importance of reference effects in markets where product attributes in the choice set change over time. Empirical research on reference effects has been only on non-durables and therefore has focused on the price attribute, because typically only prices change over time, but other product attributes tend to be stable. But innovation-driven markets see substantial changes in product attributes over time. The authors empirically demonstrate the importance of reference quality (and price) effects in estimating a demand system for the U.S. wireless phone market.