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Promotion and Fast Food Demand

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  • Timothy J. Richards
  • Luis Padilla

Abstract

Many believe that fast food promotion is a significant cause of the obesity epidemic in North America. Industry members argue that promotion only reallocates brand shares and does not increase overall demand. We study the effect of fast food promotion on market share and total demand by estimating a discrete / continuous model of fast food restaurant choice and food expenditure that explicitly accounts for both spatial and temporal determinants of demand. Estimates are obtained using a unique panel of Canadian fast food consumers. The results show that promotion primarily increases demand and has a smaller effect on restaurant market shares. Copyright 2009, Oxford University Press.

Suggested Citation

  • Timothy J. Richards & Luis Padilla, 2009. "Promotion and Fast Food Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 168-183.
    • Handle: RePEc:oup:ajagec:v:91:y:2009:i:1:p:168-183
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2008.01163.x
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    Cited by:

    1. Spotts, Harlan E. & Weinberger, Marc G. & Assaf, A. George & Weinberger, Michelle F., 2022. "The role of paid media, earned media, and sales promotions in driving marcom sales performance in consumer services," Journal of Business Research, Elsevier, vol. 152(C), pages 387-397.
    2. Richards, Timothy J. & Mancino, Lisa, 2012. "Demand for Food Away from Home: A Multiple Discrete/Continuous Extreme Value Model," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 127103, International Association of Agricultural Economists.
    3. Lee L. Schulz & Ted C. Schroeder & Tian Xia, 2012. "Studying composite demand using scanner data: the case of ground beef in the US," Agricultural Economics, International Association of Agricultural Economists, vol. 43, pages 49-57, November.
    4. Palma, David & Ortúzar, Juan de Dios & Rizzi, Luis Ignacio & Guevara, Cristian Angelo & Casaubon, Gerard & Ma, Huiqin, 2016. "Modelling choice when price is a cue for quality: a case study with Chinese consumers," Journal of choice modelling, Elsevier, vol. 19(C), pages 24-39.
    5. Richards Timothy J. & Mancino Lisa & Nganje William, 2012. "Nutrient Demand in Food Away from Home," Forum for Health Economics & Policy, De Gruyter, vol. 15(2), pages 1-31, April.
    6. Richards, Timothy J. & Gómez, Miguel I. & Pofahl, Geoffrey, 2012. "A Multiple-discrete/Continuous Model of Price Promotion," Journal of Retailing, Elsevier, vol. 88(2), pages 206-225.
    7. Pavol KITA & Jamal HASAN, 2010. "The main factors on Slovakian consumer’s behavior regarding fast food nutrition," Management & Marketing, Economic Publishing House, vol. 5(1), Spring.
    8. Law, Cherry & Smith, Richard & Cornelsen, Laura, 2022. "Place matters: Out-of-home demand for food and beverages in Great Britain," Food Policy, Elsevier, vol. 107(C).
    9. Ehmke, Mariah D. & Willson, Tina M. & Schroeter, Christiane & Hart, Ann Marie & Coupal, Roger H., 2009. "Obesity Economics for the Western United States," Western Economics Forum, Western Agricultural Economics Association, vol. 8(2), pages 1-13.

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