A quality-based approach to estimating quantitative elasticities for differentiated products: an application to retail milk demand

Gulseven, Osman; Wohlgenant, Michael K.

doi:10.1007/s11135-014-0094-8

Cited by 3 publications

(14 citation statements)

References 23 publications

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“…In terms of the effect of fat content, Gulseven and Wohlgenant (2015) found that lipid fat contributes 0.861 to prices of milk products considered in their study. Comparatively, in linear hedonic pricing models, fat content contributes negatively to unit price (monthly average price per 8 oz.)…”

Section: Empirical Results and Discussionmentioning

confidence: 94%

“…In this section, we discuss the empirical results derived from hedonic pricing models in detail and compare and contrast our estimations with those observed in the extant literature. In terms of the effect of fat content, Gulseven and Wohlgenant (2015) found that lipid fat contributes 0.861 to prices of milk products considered in their study. Comparatively, in linear hedonic pricing models, fat content contributes negatively to unit price (monthly average price per 8 oz.)…”

Section: Empiri C Al Re Sults and Discussionmentioning

confidence: 93%

“…The contrasting result is possibly caused by model specifications and product categories taken into account. The research results of Gulseven and Wohlgenant (2015) are based on a composite viewpoint by which they aggregate several milk products and soy milk in to one product type, while our work examines different product separately. In addition, one likely reason for consumers' willingness to pay for fat content is that fat contributes to the texture, flavor, and aroma of a wide variety of foods (Drewnowski & Almiron‐Roig, 2010), the consumers who have a strong preference for flavor and taste of food might be willing to pay more for fat.…”

Section: Empirical Results and Discussionmentioning

confidence: 99%

“…If the relationship between prices and attributes is assumed to be linear, price of a good i can be derived as the sum of the attribute values (Ladd & Suvannunt, 1976). Thus, the total value of each attribute is equal to the quantity of the attribute multiplied by the implicit price of that attribute (Gulseven & Wohlgenant, 2015). The linear and semi-log hedonic pricing models are constructed as follows:…”

Section: Hedoni C Pri Cing Model De Velopmentmentioning

confidence: 99%

“…If the relationship between prices and attributes is assumed to be linear, price of a good i can be derived as the sum of the attribute values (Ladd & Suvannunt, 1976). Thus, the total value of each attribute is equal to the quantity of the attribute multiplied by the implicit price of that attribute (Gulseven & Wohlgenant, 2015). The linear and semi‐log hedonic pricing models are constructed as follows:

P_{i} = β_{0} + {falsefalse}_{\sum}^{j} β_{j} A_{normali normalj} + {falsefalse}_{\sum}^{k} D_{k} X_{normali normalk} + ε_{i}, i = 1,2, \dots, 7

\ln (P_{i}) = β_{0} + {falsefalse}_{\sum}^{j} β_{j} A_{normali normalj} + {falsefalse}_{\sum}^{k} D_{k} X_{normali normalk} + ε_{i}, i = 1,2, \dots, 7

where A ij is the amount of nutritional attribute j contained in product i .…”

Section: Hedonic Pricing Model Developmentmentioning

confidence: 99%

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Consumers preferences on nutritional attributes of dairy‐alternative beverages: hedonic pricing models

Yang

Dharmasena

2020

Food Science & Nutrition

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In the past decade, dairy alternative beverages have gained its market position as a robust competitor for conventional milk in the United States. Consumers have gradually turned away from conventional milk, leading the push towards plant-based milk products because a growing number of consumers beginning to believe that plant-based foods are healthier and more environmentally friendly than animal-based foods. As indicated by Singhal, Baker, and Baker (2017), the increasing sales trend of non-dairy beverages in westernized counties is due to consideration that foods labeled as natural are perceived to be the most healthy and appropriate nutritional choice

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Section: Empirical Results and Discussionmentioning

confidence: 94%

Section: Empiri C Al Re Sults and Discussionmentioning

confidence: 93%

Section: Empirical Results and Discussionmentioning

confidence: 99%

Section: Hedoni C Pri Cing Model De Velopmentmentioning

confidence: 99%

“…If the relationship between prices and attributes is assumed to be linear, price of a good i can be derived as the sum of the attribute values (Ladd & Suvannunt, 1976). Thus, the total value of each attribute is equal to the quantity of the attribute multiplied by the implicit price of that attribute (Gulseven & Wohlgenant, 2015). The linear and semi‐log hedonic pricing models are constructed as follows:

P_{i} = β_{0} + {falsefalse}_{\sum}^{j} β_{j} A_{normali normalj} + {falsefalse}_{\sum}^{k} D_{k} X_{normali normalk} + ε_{i}, i = 1,2, \dots, 7

\ln (P_{i}) = β_{0} + {falsefalse}_{\sum}^{j} β_{j} A_{normali normalj} + {falsefalse}_{\sum}^{k} D_{k} X_{normali normalk} + ε_{i}, i = 1,2, \dots, 7

where A ij is the amount of nutritional attribute j contained in product i .…”

Section: Hedonic Pricing Model Developmentmentioning

confidence: 99%

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Consumers preferences on nutritional attributes of dairy‐alternative beverages: hedonic pricing models

Yang

Dharmasena

2020

Food Science & Nutrition

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Quality, Heterogeneous Goods, and Cross-Section Demand

Wohlgenant

2021

Palgrave Studies in Agricultural Economics and Food Policy

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U.S. Consumer Demand for Plant-Based Milk Alternative Beverages: Hedonic Metric Augmented Barten’s Synthetic Model

Yang

Dharmasena

2021

Foods

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Consumers in the U.S. increasingly prefer plant-based milk alternative beverages (abbreviated “plant milk”) to conventional milk. This study is motivated by the need to take into consideration varied nutritional and qualitative attributes in plant milk to examine consumers’ purchasing behavior and estimate demand elasticities which are achieved by a new approach combing hedonic pricing model with Barten’s synthetic demand system. The method of estimation is enlightened from the common practice of companies differentiating their products in multidimensions in terms of attributes. A research dataset was uniquely created by associating the products’ purchase data from Nielsen Homescan dataset with exclusive first-hand nutritional data. Estimations began with creating a multidimensional hedonic attribute space based on the qualitative information of different types of plant milk and conventional milk available to consumers and then calculating the hedonic distances by Euclidean distance measurement to reparametrize Barten’s synthetic demand system. Estimation results showed that the highest own-price elasticity pertained to soy milk which was −0.25. Three plant milk types had inelastic demand. Soy milk exerted substituting effects on all types of conventional milk products and vice versa. Soy milk, rice milk and almond milk entertained complementary relationships between each other and four types of conventional milk were strong substitutes within the group.

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A quality-based approach to estimating quantitative elasticities for differentiated products: an application to retail milk demand

Cited by 3 publications

References 23 publications

Consumers preferences on nutritional attributes of dairy‐alternative beverages: hedonic pricing models

Consumers preferences on nutritional attributes of dairy‐alternative beverages: hedonic pricing models

Quality, Heterogeneous Goods, and Cross-Section Demand

U.S. Consumer Demand for Plant-Based Milk Alternative Beverages: Hedonic Metric Augmented Barten’s Synthetic Model

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