Baby-cut carrots as convenience incentives – quality-based price discrimination on retail fresh-cut produce

Xiao Dong

Applied Economics Letters, 2023, vol. 30, issue 3, 255-258

Abstract: Empirical evidence of quality-based price discrimination (second degree) is limited. I find consumers have positive and heterogenous valuations for the baby-cut attribute of carrots, and I model and establish evidence that retailers utilize this quality attribute to price discriminate. From a welfare perspective, I show the development and introduction of high-quality substitutes, pre-cut and pre-processed versions of fresh produce, increase retail profits with minimal impact on consumer surplus under quality-based price discrimination.

Date: 2023
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DOI: 10.1080/13504851.2021.1983131

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