Home Bias in U.S. Beer Consumption
AbstractWe apply the Berry, Levinsohn and Pakes (1995) market equilibrium model (BLP) to data from 30 brands of beers sold in 12 U.S. cities over 20 quarters (1988-92) to estimate the consumers taste for beer characteristics (price, alcohol content, and calories) as well as for the cultural region of origin (USA, Anglo-European, Germanic, and countries bordering the U.S.). Consumer heterogeneity is allowed with respect to age, income and gender. Overall we end up with 7,200 beer brand observations (30x12x20) and 13,920 (58 random draws x 12 x 20) consumer observations. Empirical results indicate that indeed there is home bias with respect to European beers and somewhat less so with respect to beers from bordering countries (Mexico and Canada). Home bias is more accentuated among older males who are more affluent. Furthermore, the own-price elasticities and the cross price elasticities of demand are higher for foreign beers, indicating a higher degree of loyalty and differentiation for domestic beers.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 105th Seminar, March 8-10, 2007, Bologna, Italy with number 7883.
Date of creation: 2007
Date of revision:
Home bias; beer; country of origin; demand; differentiated products; Food Consumption/Nutrition/Food Safety;
Other versions of this item:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
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