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Abstract
By endogenizing unit value and coupon redemption, we estimate U.S.
household cheese purchase, quality choice, and coupon redemption
equations simultaneously. Zero purchases and missing values are taken
into account in the model to correct for the selectivity bias. The
correlations among the three equations are found to be significant.
Empirical findings show that high quality choice significantly decreases
cheese purchases, while cheese coupon usage significantly increases
purchases. We find that higher income households select higher quality
cheese, while larger households choose lower quality cheese. Frequent
coupon redeemers are found to purchase lower quality cheese. For coupon
redemption, we find that African American households redeem less while
Asian households redeem more comparing to the Caucasian households.