The demand for food products

Christine Boizot (), Jean-Marc Robin and Michael Visser
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Christine Boizot: CORELA - Laboratoire de Recherche sur la Consommation - INRA - Institut National de la Recherche Agronomique

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Abstract: In this paper we study household purchase behaviour of storable food products. An inventoly model is developed in which the household chooses an optimal stock level of the product. Storage of the product is costly, there is a fixed cost per purchase occasion, and the market price is sometimes discounted because of price promotions. We show that the optimal purchase policy is an s, S policy. The model is used to derive predictions on the correlations between interpurchase times and purchased quantities on the one hand, and prices on the other. These predictions are empirically verified using consumer panel data.

Date: 2001-04
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Citations: View citations in EconPapers (31)

Published in The Economic Journal, 2001, 111 (470), pp.391 - 419

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03416605

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