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Do Consumers Pay for Being Healthy Conscious?— An Analysis of Price Discrimination on Healthier Food Product

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  • Zhan, Congnan

Abstract

‘Healthier food product’ has experienced a rapid growth rate in recent years in U.S. because of the increasing consumer demand for healthier and environmental friendlier lifestyle. This analysis is looking for price discrimination evidences by comparing price cost margins of regular food products and healthier food products. Price cost margins are computed by solving firms' profit maximization problem and relevant parameters are estimated from consumers' choice decisions. Specifically, price elasticities and price coefficients are estimated using nonlinear GMM estimation in order to construct price cost margin. The empirical analysis employs product level ketchup data across 50 MSA in U.S. from 2001 to 2006.

Suggested Citation

  • Zhan, Congnan, 2010. "Do Consumers Pay for Being Healthy Conscious?— An Analysis of Price Discrimination on Healthier Food Product," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 60907, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea10:60907
    DOI: 10.22004/ag.econ.60907
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    References listed on IDEAS

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    1. Steven Berry & Ariel Pakes, 2007. "The Pure Characteristics Demand Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 48(4), pages 1193-1225, November.
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