The Impact of Retail Store Brands on Manufacturer Brands: A Generalization of Steiner’s Elasticity Model

Michael Cohen () and Ronald Cotterill ()
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Michael Cohen: New York University

No 110, 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: Store brands are thought to improve a retailer's position relative to leading brand manufacturers and to reduce retail prices. Steiner (2004) o ers a characterization of typical industry structures by considering the relationship between interbrand and intrabrand elasticities. We estimate a model of demand and use elasticity estimates to characterize Boston's uid milk market as falling into one of Steiner's \typical industry structures". In addition to investigating the relationship between interbrand and intrabrand elasticities we derive and test structural models of supply channel conduct that explicitly identify the pricing conduct that is implicit in Steiner's \typical industry structures". Using scanner data for brand level milk sales milk sales at leading retail chains in Boston we show that store brands do in fact improve the pro t position of retailer vis a vis the manufacturer, reduce retail prices, and improve total welfare in the market.

Keywords: Discrete Choice Models; Vertical Structural Models; Non-Nested Hypothesis testing; Economics of Private Label Retailing (search for similar items in EconPapers)
JEL-codes: L13 L66 L81 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2008-11
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Citations: View citations in EconPapers (1)

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Working Paper: The Impact of Retail Store Brands on Manufacturer Brands: A Generalization of Steiner’s Elasticity Model (2008)
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