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Demand estimation and market definition in quality-differentiated products: The case of beer in Argentina

Author

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  • Coloma, Germán

    (CEMA University, Buenos Aires, Argentina)

Abstract

This paper analyzes the issue of demand estimation and market definition in industries where products differ according to their quality levels. An econometric methodology based on substitution elasticities is explained, and then applied to the Argentine beer industry, using data from the period 2011–2017. The results are compared to equivalent ones obtained using an alternative methodology, concluding that in Argentina we can identify two relevant markets inside the beer industry (corresponding to high/medium quality beers, and low quality beers).

Suggested Citation

  • Coloma, Germán, 2023. "Demand estimation and market definition in quality-differentiated products: The case of beer in Argentina," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 69, pages 48-64.
    • Handle: RePEc:ris:apltrx:0464
    as

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    References listed on IDEAS

    as
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    5. Toro-Gonzalez, Daniel & McCluskey, Jill J. & Mittelhammer, Ron, 2014. "Beer Snobs Do Exist: Estimation of Beer Demand by Type," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 39(2), pages 1-14.
    6. Coloma, German, 2009. "Estimation of Demand Systems Based on Elasticities of Substitution," Review of Applied Economics, Lincoln University, Department of Financial and Business Systems, vol. 5(1-2), pages 1-18, March.
    7. Sutton, John, 1986. "Vertical Product Differentiation: Some Basic Themes," American Economic Review, American Economic Association, vol. 76(2), pages 393-398, May.
    8. Nelson, Jon P., 2014. "Estimating the price elasticity of beer: Meta-analysis of data with heterogeneity, dependence, and publication bias," Journal of Health Economics, Elsevier, vol. 33(C), pages 180-187.
    9. Germán Coloma, 2011. "Market Delineation And Merger Simulation: A Proposed Methodology With An Application To The Argentine Biscuit Market," Journal of Competition Law and Economics, Oxford University Press, vol. 7(1), pages 113-131.
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    More about this item

    Keywords

    demand estimation; market definition; elasticity of substitution; beer; Argentina;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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