Estimation of the Effects of New Brands on Incumbents' Profits and Consumer Welfare: The U.S. Processed Cheese Market Case
AbstractWe estimate the effects of new brands on market competition and consumer welfare in the U.S. processed cheese market. We find that an observed increase in consumer welfare was attributable mainly to an increase in the number of brands in the sample market, while the price effect, which measures welfare change caused by adding new brands to existing brands, decreased welfare as the prices of the existing brands increased in a large portion of sample markets. The price increase was most pronounced among the introducer?s existing brands.
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Bibliographic InfoPaper provided by University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy in its series Food Marketing Policy Center Research Reports with number 079.
Date of creation: 2004
Date of revision:
consumer welfare; incumbents; new brands; random coefficient model; Agribusiness; Consumer/Household Economics; Industrial Organization;
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- Aviv Nevo, 2003.
"New Products, Quality Changes, and Welfare Measures Computed from Estimated Demand Systems,"
The Review of Economics and Statistics,
MIT Press, vol. 85(2), pages 266-275, May.
- Aviv Nevo, 2001. "New Products, Quality Changes and Welfare Measures Computed From Estimated Demand Systems," NBER Working Papers 8425, National Bureau of Economic Research, Inc.
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