Quality Differentiation with Flavors: Demand Estimation of Unobserved Attributes
AbstractThis article estimates the demand for mint-flavored gum products using grocery store sales data and accounting for consumers’ valuation of quality. Unobserved product attributes, such as flavor quality, are important elements to consider when estimating the demand for gum. The estimation results suggest that gum is an inelastic product. A positive relationship between willingness to pay and unobserved quality was identified, implying that gum industry should be able to command a premium for higher quality mint flavored products.
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Bibliographic InfoPaper provided by School of Economic Sciences, Washington State University in its series Working Papers with number 2012-6.
Length: 32 pages
Date of creation: Aug 2012
Date of revision:
Quality Differentiation; Unobserved Product Attributes; Demand Estimation; Gum;
Other versions of this item:
- Toro-González Daniel & Gallardo R. Karina & Yan Jia & McCluskey Jill J., 2013. "Quality Differentiation with Flavors: Demand Estimation of Unobserved Attributes," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 11, September.
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-09 (All new papers)
- NEP-BEC-2012-09-09 (Business Economics)
- NEP-COM-2012-09-09 (Industrial Competition)
- NEP-MKT-2012-09-09 (Marketing)
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