A SOCIOECONOMIC APPROACH TO ASSESSING PRICE COMPETITION BETWEEN PRIVATE LABELS AND NATIONAL BRANDS: THE CASE OF SHREDDED CHEESE

An LA/AIDS model is developed to estimate demand elasticities for packages of 8-oz shredded cheese for higher- and lower-income consumers. Data used in this study are scanner data for six supermarket stores in two distinct socioeconomic areas. Results show that: (1) lower-income shoppers are more price-sensitive than higher-income shoppers for both private labels and national brands; (2) compared with private labels, consumers are very sensitive to national brands price changes even in higher-income areas; (3) cross-price elasticities between private labels and national brands are all positive, i.e., private labels and national brands are substitutes in both lower- and higher-income stores; and (4) the number of promoted items does not have a statistically significant impact on sales; instead, the percentage of price discount affects sales for both private labels and national brands.


Issue Date:
2003
Publication Type:
Conference Paper/ Presentation
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/21993
PURL Identifier:
http://purl.umn.edu/21993
Total Pages:
26
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2019-08-26

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