Recession and Income Effect on the Private Label Products Demand: A Case Study of Fluid Milk

The goal of this paper is to examine the effect of recession and income on private label demand of different package sizes of fluid milk. we use household-level transaction data for private label and national brands of fluid milk, and household-level data from Nielsen Homescan panel which is comprised of detailed purchase information for more than 72,000 households who purchase fluid milk from all U.S. retailers. The data is recorded through the years, 2004-2014 which includes Great Recession. Non-linear pricing in the fluid milk makes the price of 0.5-gallon and 1-gallon close. In addition, differences between the average prices of private label and national brands in different package sizes of fluid milk differ unexpectedly. We find that the effect of income varies across different package sizes. Specifically, the share of private label 0.25-gallon fluid milk and income are negatively related, while the effect of income for the two other sizes is statistically insignificant. The share of private label fluid milk purchases increased during the recession and continue to increase at a higher rate after the recession up to the year 2012. Different specifications the data confirm these results.

Issue Date:
Feb 04 2018
Publication Type:
Conference Paper/ Presentation
Record Identifier:
JEL Codes:
D120, M310, E320.

 Record created 2018-01-18, last modified 2018-01-22

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