Estimation of the Effects of New Brands on Incumbents' Profits and Consumer Welfare: The U.S. Processed Cheese Market Case

Donghun Kim

No 79, Food Marketing Policy Center Research Reports from University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy

Abstract: We estimate the effects of new brands on market competition and consumer welfare in the U.S. processed cheese market. We find that an observed increase in consumer welfare was attributable mainly to an increase in the number of brands in the sample market, while the price effect, which measures welfare change caused by adding new brands to existing brands, decreased welfare as the prices of the existing brands increased in a large portion of sample markets. The price increase was most pronounced among the introducer?s existing brands.

Keywords: consumer welfare; incumbents; new brands; random coefficient model; Agribusiness; Consumer/Household Economics; Industrial Organization (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:zwi:fpcrep:079

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