The Demand for Food Products: An Analysis of Interpurchase Times and Purchased Quantities
AbstractIn this paper we study household purchase behaviour of storable food products. An inventory model is developed in which the household chooses an optimal stock level of the product. Storage of the product is costly, there is a fixed cost per purchase occasion, and the market price is sometimes discounted because of price promotions. We show that the optimal purchase policy is an s, S policy. The model is used to derive predictions on the correlations between interpurchase times and purchased quantities on the one hand, and prices on the other. These predictions are empirically verified using consumer panel data.
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Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 111 (2001)
Issue (Month): 470 (April)
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Other versions of this item:
- C, Boizot & Jean-Marc Robin & Michael Visser, 1997. "The Demand for Food Products : An Analysis of Interpurchase Times and Purchased Quantities," Working Papers 97-48, Centre de Recherche en Economie et Statistique.
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