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Baby-cut carrots as convenience incentives – quality-based price discrimination on retail fresh-cut produce

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  • Xiao Dong

Abstract

Empirical evidence of quality-based price discrimination (second degree) is limited. I find consumers have positive and heterogenous valuations for the baby-cut attribute of carrots, and I model and establish evidence that retailers utilize this quality attribute to price discriminate. From a welfare perspective, I show the development and introduction of high-quality substitutes, pre-cut and pre-processed versions of fresh produce, increase retail profits with minimal impact on consumer surplus under quality-based price discrimination.

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  • Xiao Dong, 2023. "Baby-cut carrots as convenience incentives – quality-based price discrimination on retail fresh-cut produce," Applied Economics Letters, Taylor & Francis Journals, vol. 30(3), pages 255-258, February.
    • Handle: RePEc:taf:apeclt:v:30:y:2023:i:3:p:255-258
    DOI: 10.1080/13504851.2021.1983131
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