Quantity Surcharges on Groceries

Jagdish Agrawal, Pamela E. Grimm and Narasimhan Srinivasan

No 25179, Research Reports from University of Connecticut, Food Marketing Policy Center

Abstract: A quantity surcharge exists when the unit cost of a given brand is higher for a large-size package than for a smaller one. This paper examines some product and household characteristics that influence observed quantity surcharging practices. Results indicate that the propensity to buy a large-size package of a product is positively influenced by the extent of a household's usage of that product, procurement cost, and carrying capacity, and is negatively influenced by the propensity to price search. A retailer's decision to levy a quantity surcharge is, in turn, influenced by the demand for the product, the propensity to buy large-size packages, and to some extent the product's carrying cost.

Keywords: Agribusiness; Demand and Price Analysis (search for similar items in EconPapers)
Pages: 17
Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uconnr:25179

DOI: 10.22004/ag.econ.25179

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