Home Bias in U.S. Beer Consumption

Rigoberto Lopez and Xenia Matschke

No 7883, 105th Seminar, March 8-10, 2007, Bologna, Italy from European Association of Agricultural Economists

Abstract: We apply the Berry, Levinsohn and Pakes (1995) market equilibrium model (BLP) to data from 30 brands of beers sold in 12 U.S. cities over 20 quarters (1988-92) to estimate the consumers' taste for beer characteristics (price, alcohol content, and calories) as well as for the cultural region of origin (USA, Anglo-European, Germanic, and countries bordering the U.S.). Consumer heterogeneity is allowed with respect to age, income and gender. Overall we end up with 7,200 beer brand observations (30x12x20) and 13,920 (58 random draws x 12 x 20) consumer observations. Empirical results indicate that indeed there is home bias with respect to European beers and somewhat less so with respect to beers from bordering countries (Mexico and Canada). Home bias is more accentuated among older males who are more affluent. Furthermore, the own-price elasticities and the cross price elasticities of demand are higher for foreign beers, indicating a higher degree of loyalty and differentiation for domestic beers.

Keywords: Food; Consumption/Nutrition/Food; Safety (search for similar items in EconPapers)
Pages: 9
Date: 2007
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https://ageconsearch.umn.edu/record/7883/files/cp070002.pdf (application/pdf)

Related works:
Journal Article: Home Bias in US Beer Consumption (2012)
Working Paper: Home Bias in U.S. Beer Consumption (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa105:7883

DOI: 10.22004/ag.econ.7883

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