Demand elasticities and price-cost margin ratios for grocery products in different socioeconomic groups

C. Akbay and E. Jones
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C. Akbay: Department of Agricultural Economics, University of Sutcu Imam, Kahramanmaras, Turkey
E. Jones: Department of Agricultural Economics, University of Sutcu Imam, Kahramanmaras, Turkey

Agricultural Economics, 2006, vol. 52, issue 5, 225-235

Abstract: In this paper, the demand elasticities and the size of price cost margin (PCM) ratios were investigated for private and national branded products using scanner data from a large supermarket chain in Ohio, USA. Demand elasticities and PCM ratios were measured for 32 national branded and 14 private label products for 9 food categories by using Almost Ideal Demand System. According to the results, lower-income shoppers were more prices sensitive than higher-income shoppers and the average price elasticities were ranged between -1.96 (Snacks) and -3.33 (ice-cream). According to the results, non-collusive case gave smaller PCM than the Bertrand case and the average PCM ratios ranged from 27% for ice cream to 54% for chips.

Keywords: price competition; AIDS model; food; elasticity; private and national brand (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:52:y:2006:i:5:id:5019-agricecon

DOI: 10.17221/5019-AGRICECON

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