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Abstract

Scanner data for breakfast cereals are used to estimate demand elasticities for six supermarket stores in two distinct socio-economic areas. Three stores are in low-income locations and three are in high-income locations. A time series cross-section model is estimated for five product categories across six cross sections over forty-two weeks. Results show lower-income shoppers to have more elastic demands for four of the five product categories: private label cold cereals, the top ten brands of cold cereals, all other brands of cold cereals, and hot cereals. Price is not statistically significant for a fifth product category, snack cereals.

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