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Acceptable price of packaged palm cooking oil amid scarcity in Indonesia

Yudha Purbawa (yudh016@brin.go.id), I Gede Mahatma Yuda Bakti (iged007@brin.go.id), Helena J. Purba (hele003@brin.go.id), Nidya J. Astrini (nidy002@brin.go.id), Romeyn P. Putra (rome002@brin.go.id) and Sik Sumaedi (siks001@brin.go.id)
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Yudha Purbawa: Research Organization for Governance, Economy, and Community Welfare, BRIN
I Gede Mahatma Yuda Bakti: Research Organization for Governance, Economy, and Community Welfare, BRIN
Helena J. Purba: Research Organization for Governance, Economy, and Community Welfare, BRIN
Nidya J. Astrini: Research Organization for Governance, Economy, and Community Welfare, BRIN
Romeyn P. Putra: Research Organization for Governance, Economy, and Community Welfare, BRIN
Sik Sumaedi: National Research and Innovation Agency (BRIN)

Journal of Revenue and Pricing Management, 2023, vol. 22, issue 6, No 3, 446-454

Abstract: Abstract This article is aimed to estimate the acceptable price range of packaged cooking oil, one of the vital commodities of Indonesian daily needs, under scarcity which lead to the rocketing price from December 2021 until June 2022. An online survey of 493 consumers of packaged cooking oil was conducted to obtain the sensitivity price responses, and the van Westendorp technique was utilized to estimate the acceptable price range. The acceptable price range of packaged cooking oil under scarcity was estimated at approximately 15,000 to 19,500 IDR per liter; it was relatively far below the highest price during scarcity (27,000 IDR per liter). Seemingly the price during scarcity was unfair to consumers because they still purchased it beyond their acceptable price. The government has to maintain the packaged cooking oil price in its psychologically acceptable range since controlling the price is one of its mandates. This article applied the van Westendorp price sensitivity meter in a new market condition in which packaged cooking oil was scarce, while this technique was commonly applied for estimating suitable price limits of the new products.

Keywords: Packaged cooking oil; Acceptable price range; Van Westendorp; Scarcity (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1057/s41272-023-00428-8

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