Price Sensitivities for U.S. Frozen Dairy Products

Maynard, Leigh J.; Veeramani, Venkat N.

doi:10.1017/s1074070800028315

Cited by 10 publications

(7 citation statements)

References 15 publications

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“…Barten (1993) developed a synthetic system which nests four popular differential demand systems including the Rotterdam, LA/AIDS, CBS (Central Bureau of Statistics), and NBR (National Bureau Research). Maynard and Veeramani (2003) also show that synthetic models help avoid specification bias by allowing more generalized functional forms.…”

Section: Methodsmentioning

confidence: 90%

Assessing the Demand for a Functional Food Product: Is There Cannibalization in the Orange Juice Category?

Yuan

Capps

Nayga

2009

Agric. resour. econ. rev.

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The demand for functional foods has increased notably in recent years due to growing consumer interest in diet and health issues. Currently, the food industry is introducing many types of new food products with functional attributes. Consequently, cannibalization is a critical issue for firms that offer multiple products within a certain product category. The identification and assessment of cannibalization are integral factors when making strategic decisions about new product introductions. Using scanner data from Information Resources, Inc. (IRI), pertaining to a particular functional food, namely a phytosterol-enriched product for orange juice, we find that no cannibalization effects exist with respect to its introduction. We also provide estimates of own-price and cross-price elasticities of the orange juice category using a synthetic demand system.

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Section: Methodsmentioning

confidence: 90%

Assessing the Demand for a Functional Food Product: Is There Cannibalization in the Orange Juice Category?

Yuan

Capps

Nayga

2009

Agric. resour. econ. rev.

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“…The derived own-price elasticities for cottage cheese and butter are similar to those derived from the differential model used by Maynard and Liu (1999), and the uncensored model of Heien and Wessells (1990; with the exception of frozen yogurt)--in that elasticity estimates for this study are close to or greater than 1. Maynard and Veeramani (2003) also found the own-price elasticities for frozen yogurt (−1.64), sherbet/ice milk (−1.11), and branded novelties (−1.81) to be elastic and responsive to changes in price.…”

Section: Compensated Demand Elasticitiesmentioning

confidence: 88%

“…The demand for frozen desserts were analyzed by Maynard and Narayanan (2002), using an ordinary (quantity-dependent) synthetic conditional demand system model framework. Elasticity estimates were derived for 7 products including ice cream, frozen yogurt, sherbet, sorbet, branded frozen novelties, private-label frozen novelties, and other packaged frozen products.…”

Section: Empirical Literature Of Dairy Product Demandsmentioning

confidence: 99%

Assessing economic and demographic factors that influence United States dairy demand

Davis

Yen

Dong

et al. 2011

Journal of Dairy Science

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Low-fat dairy products are key components of a healthy diet for all Americans. As the USDA increases its focus on nutrition and healthy eating, it is important to understand the underlying demands for dairy products, both the healthy and the less healthy ones. The consumption of fluid milk products has decreased over the last decade, whereas milk used for manufactured dairy products such as cheese, ice cream, yogurt, and butter, and for use as an ingredient in other food products, has risen. The objective of this study is to determine the effects of changes in demographic variables, retail prices, and total dairy expenditure on at-home consumption of dairy products, using purchase data from Nielsen 2007 Homescan (ACNielsen, New York, NY) data. To derive the demand elasticities for 16 products, a censored Almost Ideal Demand System model is used. Results reveal that demographic variables do have effects on the purchase of the 16 products, and own-price elasticities are 1 or greater for all 16 products for both uncompensated and compensated elasticities except 4: ice cream, refrigerated yogurt, processed cheese, and margarine. A substitution relationship exists among all fluid milk categories, natural and processed cheese, low-fat ice cream, and refrigerated yogurt, butter, and margarine.

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“…If the null hypothesis is not rejected, our alternative choice is the method of Seemingly Unrelated Regressions (SUR), which is efficient if prices and expenditure are not correlated with the error term (Hill, Griffiths, & Lim, 2008, p. 287). In the second step, Wald tests were performed to determine whether the general Barten specification could be rejected in favor of any of the nested models, following Maynard and Veeramani (2003), or more recently Yuan, Capps, and Nayga (2009). Third, in case a submodel is found preferable, the exogeneity test of the first step is applied again to the corresponding submodel.…”

Section: Data and Estimationmentioning

confidence: 99%

Price Sensitivity Within and Across Retail Formats

Widenhorn

Salhofer

2013

Agribusiness

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Applying a synthetic demand system approach, we examine if consumers in discount stores reveal different price elasticities of demand than those in conventional supermarkets. Based on a RollAMA dataset containing information on consumption in 12 different retail chains in Austria, we first analyze demand patterns for a scenario in which consumers only frequent either discounters or supermarkets, followed by an investigation of potential cross-format effects when both types of stores are visited. Our empirical findings suggest that for the three categories of milk products under examination, price elasticities in discount stores are generally higher. Beyond that, demand reactions in supermarkets with respect to price changes in discounters differ from the reverse case, i.e., from demand reactions in discounters when supermarket prices are changed. This is especially true for the case of drinking milk, which confirms the strategic potential of drinking milk as a loss leader product.

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Price Sensitivities for U.S. Frozen Dairy Products

Cited by 10 publications

References 15 publications

Assessing the Demand for a Functional Food Product: Is There Cannibalization in the Orange Juice Category?

Assessing the Demand for a Functional Food Product: Is There Cannibalization in the Orange Juice Category?

Assessing economic and demographic factors that influence United States dairy demand

Price Sensitivity Within and Across Retail Formats

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