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Estimating demand elasticities for cereal products: A socioeconomic approach using scanner data

Author

Listed:
  • Eugene Jones

    (Department of Agricultural Economics, The Ohio State University)

  • Barry W. Mustiful

    (Department of Agricultural Economics, The Ohio State University)

  • Wen S. Chern

    (Department of Agricultural Economics, The Ohio State University)

Abstract

Scanner data are used to estimate demand elasticities for breakfast cereals in two socioeconomic areas. Five groups of cereals are identified and the own-price elasticities for four of these are negative, statistically significant, and in the elastic range. A fifth group, snack cereals, is shown to have a statistically insignificant own-price elasticity and this is hypothesized to be related to impulse buying. Lower-income shoppers are more inclined to purchase the lowest-priced products within a product group; they are also more predisposed to select purchases from lower-priced product groups. Lower-income shoppers purchase private label cereals with twice the frequency of higher-income shoppers. ©1994 by John Wiley & Sons, Inc.

Suggested Citation

  • Eugene Jones & Barry W. Mustiful & Wen S. Chern, 1994. "Estimating demand elasticities for cereal products: A socioeconomic approach using scanner data," Agribusiness, John Wiley & Sons, Ltd., vol. 10(4), pages 325-339.
    • Handle: RePEc:wly:agribz:v:10:y:1994:i:4:p:325-339
    DOI: 10.1002/1520-6297(199407/08)10:4<325::AID-AGR2720100406>3.0.CO;2-H
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    References listed on IDEAS

    as
    1. McLaughlin, Edward W. & Lesser, William H., 1986. "Experimental Price Variability and Consumer Response: Tracking Potato Sales with Scanners," Staff Papers 186131, Cornell University, Department of Applied Economics and Management.
    2. Oral Capps, 1989. "Utilizing Scanner Data to Estimate Retail Demand Functions for Meat Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 750-760.
    3. Oral Capps & Rodolfo M. Nayga, 1991. "Demand for fresh beef products in supermarkets: A trial with scanner data," Agribusiness, John Wiley & Sons, Ltd., vol. 7(3), pages 241-251.
    4. Hoy F. Carman & Enrique E. Figueroa, 1986. "An analysis of factors associated with weekly food store sales variation," Agribusiness, John Wiley & Sons, Ltd., vol. 2(3), pages 375-390.
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    Cited by:

    1. Eugene Jones & Cuma Akbay & Brian Roe & Wen S. Chern, 2003. "Analyses of consumers' dietary behavior: An application of the AIDS model to supermarket scanner data," Agribusiness, John Wiley & Sons, Ltd., vol. 19(2), pages 203-221.
    2. Vickner, Steven S. & Davies, Stephen P. & Fulton, Joan R. & Vantreese, Valerie L., 2000. "Estimating Market Power And Pricing Conduct For Private-Label And National Brands In A Product-Differentiated Oligopoly: The Case Of A Frozen Vegetable Market," Journal of Food Distribution Research, Food Distribution Research Society, vol. 31(2), pages 1-13, July.

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