EconPapers    
Economics at your fingertips  
 

Demand for differentiated milk products: Implications for price competition

Elena López () and Rigoberto Lopez

No 805, Alcamentos from Universidad de Alcalá, Departamento de Economía.

Abstract: We apply the Berry, Levinsohn and Pakes (1995) model to scanner data from Boston supermarkets augmented with consumer characteristics data in order to analyze consumer choices and price competition in a differentiated fluid milk market. Milk characteristics include price, fat content, brand name and the organic and/or lactose-free nature of the product. Empirical results show that consumer valuation of fat decreases with income but increases with the number of children. Low-fat and specialty milks, such as organic and lactose-free milks, are preferred by high-income consumers with no children. Although all milks are price elastic at the individual brand level, the cross-price elasticities are quite low and negligible for specialty milks. Based on calculated Lerner indexes, private label milks have the highest percent markups despite their lower prices, while specialty milks have the lowest markups despite their higher prices, which attests to a greater degree of market power for conventional and particularly for private label milk.

Keywords: Demand analysis; random coefficients model; milk; consumer behavior; retail pricing; markups; competition. (search for similar items in EconPapers)
JEL-codes: D12 D40 L11 L81 (search for similar items in EconPapers)
Pages: pages 26
Date: 2008
New Economics Papers: this item is included in nep-com, nep-mic and nep-mkt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://ebuah.uah.es/dspace/bitstream/handle/10017/2261/Alcamentos0805.pdf (application/pdf)

Related works:
Journal Article: Demand for differentiated milk products: implications for price competition (2009) Downloads
Working Paper: Demand for Differentiated Milk Products: Implications for Price Competition (2008) Downloads
Working Paper: Demand for Differentiated Milk Products: Implications for Price Competition (2008) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:alc:alcamo:0805

Ordering information: This working paper can be ordered from

The price is free.

Access Statistics for this paper

More papers in Alcamentos from Universidad de Alcalá, Departamento de Economía. Alcalá de Henares 28803. Contact information at EDIRC.
Bibliographic data for series maintained by Juan Muro ().

 
Page updated 2024-05-20
Handle: RePEc:alc:alcamo:0805