Demand for Differentiated Milk Products: Implications for Price Competition

Elena Lopez () and Rigoberto Lopez
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Elena Lopez: University of Alcalá

No 104, Food Marketing Policy Center Research Reports from University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy

Abstract: This article uses a discrete choice, random coefficients logit model for analyzing consumer behavior and retail price competition in the Boston fluid milk market. The problems of product dimensionality and consumer heterogeneity implied by imperfect substitution in markets with differentiated products were solved by applying the model of Berry, Levinhson and Pakes (1995). Empirical results show that private label milks have the highest markups in spite of lower prices, which may explain their rapid expansion, while low-fat and specialty milks such as organic and lactose-free are preferred by high income groups with no children.

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: 22 pages
Date: 2008-04
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Demand for differentiated milk products: implications for price competition (2009)
Working Paper: Demand for Differentiated Milk Products: Implications for Price Competition (2008)
Working Paper: Demand for differentiated milk products: Implications for price competition (2008)
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