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Abstract
This article employs a nation-wide sample of supermarket scanner data to
study product and brand competition in the Italian breakfast cereal market. A modified
Almost Ideal Demand System (AIDS), that includes Distance Metrics (DMs) as
proposed by Pinkse, Slade and Brett (2002), is estimated to study demand responses,
substitution patterns, own-price and cross-price elasticities. Estimation results provide
evidence of some degree of brand loyalty, while consumers do not seem loyal to the
product type. Elasticity estimates point out the presence of patterns of substitution
within products sharing the same brand and similar nutritional characteristics.