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Estimating Market Power And Pricing Conduct For Private-Label And National Brands In A Product-Differentiated Oligopoly: The Case Of A Frozen Vegetable Market

Author

Listed:
  • Vickner, Steven S.
  • Davies, Stephen P.
  • Fulton, Joan R.
  • Vantreese, Valerie L.

Abstract

This paper develops two brand-level demand models, where prices are treated as endogenous, to estimate unilateral market power in a representative product-differentiated oligopolistic food market. The results are estimated using point-of-purchase scanner data and are used to quantify the impact of a private-label brand on the economic performance of national brands. Specifically, our study calculates demand parameter estimates and returns to retailer vertical coordination for the frozen vegetable market - the third largest private-label food and beverage category in the United States, after ice cream and carbonated beverages. Consistent with broader industry trends, empirical evidence suggests that the private-label brand maintained a slight competitive advantage over Birds Eye and Green Giant.

Suggested Citation

  • Vickner, Steven S. & Davies, Stephen P. & Fulton, Joan R. & Vantreese, Valerie L., 2000. "Estimating Market Power And Pricing Conduct For Private-Label And National Brands In A Product-Differentiated Oligopoly: The Case Of A Frozen Vegetable Market," Journal of Food Distribution Research, Food Distribution Research Society, vol. 31(2), pages 1-13, July.
    • Handle: RePEc:ags:jlofdr:27755
    DOI: 10.22004/ag.econ.27755
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    References listed on IDEAS

    as
    1. Cotterill, Ronald W & Putsis, William P, Jr & Dhar, Ravi, 2000. "Assessing the Competitive Interaction between Private Labels and National Brands," The Journal of Business, University of Chicago Press, vol. 73(1), pages 109-137, January.
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    3. Vickner, Steven S. & Davies, Stephen P., 1999. "Estimating Market Power and Pricing Conduct in a Product-Differentiated Oligopoly: The Case of the Domestic Spaghetti Sauce Industry," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 31(1), pages 1-13, April.
    4. Cotterill, Ronald W. & Haller, Lawrence E., 1997. "An Econometric Analysis of the Demand for RTE Cereal: Product Market Definition and Unilateral Market Power Effects," Research Reports 25218, University of Connecticut, Food Marketing Policy Center.
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    Cited by:

    1. C. Akbay & E. Jones, 2006. "Demand elasticities and price-cost margin ratios for grocery products in different socioeconomic groups," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 52(5), pages 225-235.
    2. Stefan Hirsch & Giulia Tiboldo & Rigoberto A. Lopez, 2018. "A tale of two Italian cities: brand-level milk demand and price competition," Applied Economics, Taylor & Francis Journals, vol. 50(49), pages 5239-5252, October.

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