IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v31y2015i2p281-292.html
   My bibliography  Save this article

Estimating the Implicit Price of Convenience: A Hedonic Analysis of the US Breakfast Sausage Market

Author

Listed:
  • Steven S. Vickner

Abstract

ABSTRACT Using 52 weeks of syndicated point‐of‐purchase scanner data at the US‐level, a hedonic pricing model was estimated and used to quantify the implicit price of convenience in the retail market for breakfast sausage products. The 45‐cent per pound premium for cooked breakfast sausage was found to be statistically significant while controlling for other important observable product attributes such as package weight, product shape, fat content, sodium content, organic label, Kosher label, meat type, and brand, as well as market conditions such as merchandising, holidays, and seasonality. Additionally, the Turnbull lower‐bound estimate of consumer willingness‐to‐pay for convenience was estimated to be 11 cents per pound. [EconLit citations: D120, M310, Q130] ©2010 Wiley Periodicals, Inc.

Suggested Citation

  • Steven S. Vickner, 2015. "Estimating the Implicit Price of Convenience: A Hedonic Analysis of the US Breakfast Sausage Market," Agribusiness, John Wiley & Sons, Ltd., vol. 31(2), pages 281-292, April.
    • Handle: RePEc:wly:agribz:v:31:y:2015:i:2:p:281-292
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/agr.21404
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jean Kinsey, 1983. "Working Wives and the Marginal Propensity to Consume Food Away from Home," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(1), pages 10-19.
    2. Abelson, P. W. & Markandya, A., 1985. "The interpretation of capitalized hedonic prices in a dynamic environment," Journal of Environmental Economics and Management, Elsevier, vol. 12(3), pages 195-206, September.
    3. Ward, Clement E. & Lusk, Jayson L. & Dutton, Jennifer M., 2008. "Implicit Value of Retail Beef Product Attributes," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 33(3), pages 1-18.
    4. Frederick C. Mills, 1927. "Introduction to "The Behavior of Prices"," NBER Chapters, in: The Behavior of Prices, pages 31-36, National Bureau of Economic Research, Inc.
    5. Hamermesh, Daniel S., 2007. "AJAE Appendix: Time to Eat: Household Production Under Increasing Income Inequality," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 89(4), pages 1-8, November.
    6. Mendelsohn, Robert, 1984. "Estimating the Structural Equations of Implicit Markets and Household Production Functions," The Review of Economics and Statistics, MIT Press, vol. 66(4), pages 673-677, November.
    7. Ivar Ekeland & James J. Heckman & Lars Nesheim, 2004. "Identification and Estimation of Hedonic Models," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 60-109, February.
    8. James J. Heckman & Rosa L. Matzkin & Lars Nesheim, 2010. "Nonparametric Identification and Estimation of Nonadditive Hedonic Models," Econometrica, Econometric Society, vol. 78(5), pages 1569-1591, September.
    9. K. E. McConnell, 1990. "Double Counting in Hedonic and Travel Cost Models," Land Economics, University of Wisconsin Press, vol. 66(2), pages 121-127.
    10. Parcell, Joseph L. & Schroeder, Ted C., 2007. "Hedonic Retail Beef and Pork Product Prices," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 39(1), pages 1-18, April.
    11. Douglas M. Larson & Sabina L. Shaikh, 2001. "Empirical Specification Requirements for Two-Constraint Models of Recreation Choice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 428-440.
    12. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    13. Ivar Ekeland & James J. Heckman & Lars Nesheim, 2002. "Identifying Hedonic Models," American Economic Review, American Economic Association, vol. 92(2), pages 304-309, May.
    14. Timothy C. Haab & Kenneth E. McConnell, 2002. "Valuing Environmental and Natural Resources," Books, Edward Elgar Publishing, number 2427.
    15. Kahn, Shulamit & Lang, Kevin, 1988. "Efficient Estimation of Structural Hedonic Systems," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 29(1), pages 157-166, February.
    16. Schulz, Lee L. & Schroeder, Ted C. & White, Katharine L., 2012. "Value of Beef Steak Branding: Hedonic Analysis of Retail Scanner Data," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 41(2), pages 1-14, August.
    17. Leon N. Moses & Harold F. Williamson & Jr., 1963. "Value of Time, Choice of Mode, and the Subsidy Issue in Urban Transportation," Journal of Political Economy, University of Chicago Press, vol. 71(3), pages 247-247.
    18. Bartik, Timothy J, 1987. "The Estimation of Demand Parameters in Hedonic Price Models," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 81-88, February.
    19. Smith, V. Kerry, 1997. "Time and the Valuation of Environmental Resources," Discussion Papers 10485, Resources for the Future.
    20. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    21. Brown, James N & Rosen, Harvey S, 1982. "On the Estimation of Structural Hedonic Price Models," Econometrica, Econometric Society, vol. 50(3), pages 765-768, May.
    22. Carlos E. Carpio & Michael K. Wohlgenant & Charles D. Safley, 2008. "A Structural Econometric Model of Joint Consumption of Goods and Recreational Time: An Application to Pick-Your-Own Fruit," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 644-657.
    23. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    24. Small, Kenneth A, 1982. "The Scheduling of Consumer Activities: Work Trips," American Economic Review, American Economic Association, vol. 72(3), pages 467-479, June.
    25. Huffman, Wallace E., 2011. "Household Production and the Demand for Food and Other Inputs: U.S. Evidence," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(3), pages 1-23, December.
    26. Fred J. Prochaska & R. A. Schrimper, 1973. "Opportunity Cost of Time and Other Socioeconomic Effects on Away-From-Home Food Consumption," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 55(4_Part_1), pages 595-603.
    27. DeSerpa, A C, 1971. "A Theory of the Economics of Time," Economic Journal, Royal Economic Society, vol. 81(324), pages 828-846, December.
    28. Patrick Bajari & Matthew E. Kahn, 2005. "Estimating Housing Demand With an Application to Explaining Racial Segregation in Cities," Journal of Business & Economic Statistics, American Statistical Association, vol. 23, pages 20-33, January.
    29. Muellbauer, John, 1974. "Household Production Theory, Quality, and the "Hedonic Technique."," American Economic Review, American Economic Association, vol. 64(6), pages 977-994, December.
    30. Herbert Mohring, 1961. "Land Values and the Measurement of Highway Benefits," Journal of Political Economy, University of Chicago Press, vol. 69(3), pages 236-236.
    31. Frederick V. Waugh, 1928. "Quality Factors Influencing Vegetable Prices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 10(2), pages 185-196.
    32. Oral Capps & John R. Tedford & Joseph Havlicek, 1985. "Household Demand for Convenience and Nonconvenience Foods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 67(4), pages 862-869.
    33. Epple, Dennis, 1987. "Hedonic Prices and Implicit Markets: Estimating Demand and Supply Functions for Differentiated Products," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 59-80, February.
    34. John L. Park & Oral Capps, 1997. "Demand for Prepared Meals by U.S. Households," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 814-824.
    35. Barbara J. Redman, 1980. "The Impact of Women's Time Allocation on Expenditure for Meals Away from Home and Prepared Foods," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(2), pages 234-237.
    36. Vicki A. McCracken & Jon A. Brandt, 1987. "Household Consumption of Food-Away-From-Home: Total Expenditure and by Type of Food Facility," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(2), pages 274-284.
    37. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
    38. Chang, Jae Bong & Lusk, Jayson L. & Norwood, F. Bailey, 2010. "The Price of Happy Hens: A Hedonic Analysis of Retail Egg Prices," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(3), pages 1-18, December.
    39. Bender, Bruce & Gronberg, Timothy J & Hwang, Hae-Shin, 1980. "Choice of Functional Form and the Demand for Air Quality," The Review of Economics and Statistics, MIT Press, vol. 62(4), pages 638-643, November.
    40. Patrick Bajari & C. Lanier Benkard, 2005. "Demand Estimation with Heterogeneous Consumers and Unobserved Product Characteristics: A Hedonic Approach," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1239-1276, December.
    41. Frederick C. Mills, 1927. "The Behavior of Prices," NBER Books, National Bureau of Economic Research, Inc, number mill27-1.
    42. Frederick C. Mills, 1927. "Appendix to "The Behavior of Prices"," NBER Chapters, in: The Behavior of Prices, pages 441-586, National Bureau of Economic Research, Inc.
    43. repec:dau:papers:123456789/6486 is not listed on IDEAS
    44. Halvorsen, Robert & Pollakowski, Henry O., 1981. "Choice of functional form for hedonic price equations," Journal of Urban Economics, Elsevier, vol. 10(1), pages 37-49, July.
    45. Jekanowski, Mark D. & Binkley, James K. & Eales, James S., 2001. "Convenience, Accessibility, And The Demand For Fast Food," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(1), pages 1-17, July.
    46. Gronau, Reuben, 1980. "Home Production-A Forgotten Industry," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 408-416, August.
    47. Diamond, Douglas Jr. & Smith, Barton A., 1985. "Simultaneity in the market for housing characteristics," Journal of Urban Economics, Elsevier, vol. 17(3), pages 280-292, May.
    48. Mendelsohn, Robert, 1985. "Identifying Structural Equations with Single Market Data," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 525-529, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dengjun Zhang & Geir Sogn-Grundvåg & Frank Asche & James A. Young, 2018. "Eco-Labeling and Retailer Pricing Strategies: The U.K. Haddock Market," Sustainability, MDPI, vol. 10(5), pages 1-13, May.
    2. Smed, Sinne & Hansen, Lars Garn, 2018. "Consumer Valuation of Health Attributes in Food," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 43(2), May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vickner, Steven S., 2012. "Measuring the Value of Convenience: A Hedonic Pricing Model Approach in the Market for Breakfast Sausages," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124902, Agricultural and Applied Economics Association.
    2. Teuber, Ramona, 2010. "Estimating the Demand for Sensory Quality – Theoretical Considerations and an Empirical Application to Specialty Coffee," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 59(03), pages 1-14, September.
    3. Nicolai V. Kuminoff & V. Kerry Smith & Christopher Timmins, 2010. "The New Economics of Equilibrium Sorting and its Transformational Role for Policy Evaluation," NBER Working Papers 16349, National Bureau of Economic Research, Inc.
    4. Zhang, Nan & Mendelsohn, Robert & Shaw, Daigee, 2023. "How to Identify and Estimate the Demand for Job Safety?," MPRA Paper 118594, University Library of Munich, Germany.
    5. Laura Andersen & Sinne Smed, 2013. "What is it consumers really want, and how can their preferences be influenced? The case of fat in milk," Empirical Economics, Springer, vol. 45(1), pages 323-347, August.
    6. Teuber, Ramona, 2010. "Estimating the Demand for Sensory Quality - Theoretical Considerations and an Empirical Application to Specialty Coffee," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 59(3), pages 173-186.
    7. Teuber, Ramona, 2010. "Estimating the Demand for Sensory Quality – Theoretical Considerations and an Empirical Application to Specialty Coffee," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 59(3).
    8. Olivier Marchand & Eric Skhiri, 1995. "Prix hédoniques et estimation d'un modèle structurel d'offre et de demande de caractéristiques [Une application au marché de la location de logements en France ]," Économie et Prévision, Programme National Persée, vol. 121(5), pages 127-140.
    9. Andersen, Laura M. & Smed, Sinne, 2010. "What Is It Consumers Really Want And Why? The Case Of Fat In Milk," 115th Joint EAAE/AAEA Seminar, September 15-17, 2010, Freising-Weihenstephan, Germany 116455, European Association of Agricultural Economists.
    10. Lucija Muehlenbachs & Elisheba Spiller & Christopher Timmins, 2015. "The Housing Market Impacts of Shale Gas Development," American Economic Review, American Economic Association, vol. 105(12), pages 3633-3659, December.
    11. Fluvià, Modest & Rigall-I-Torrent, Ricard & Espinet, Josep Maria & Garriga, Anna & Saló, Albert, 2011. "Precios implícitos de los atributos de los productos turísticos: ¿Qué esconde el efecto de la localización?/Implicit Prices of the Attributes of Tourism Products: What is Hidden Behind Location?," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 29, pages 781-802, Diciembre.
    12. Steve Gibbons & Stephan Heblich & Esther Lho & Christopher Timmins, 2016. "Fear of Fracking? The Impact of the Shale Gas Exploration on House Prices in Britain," SERC Discussion Papers 0207, Centre for Economic Performance, LSE.
    13. Manuel Landajo & Celia Bilbao & Amelia Bilbao, 2012. "Nonparametric neural network modeling of hedonic prices in the housing market," Empirical Economics, Springer, vol. 42(3), pages 987-1009, June.
    14. repec:hal:spmain:info:hdl:2441/4kovgv3hs883bok2tvdkibejb6 is not listed on IDEAS
    15. repec:spo:wpmain:info:hdl:2441/4kovgv3hs883bok2tvdkibejb6 is not listed on IDEAS
    16. Victor Chernozhukov & Alfred Galichon & Marc Henry & Brendan Pass, 2018. "Single Market Nonparametric Identification of Multi-Attribute Hedonic Equilibrium Models," SciencePo Working papers Main hal-01169655, HAL.
    17. Henrik Andersson, 2008. "Willingness to Pay for Car Safety: Evidence from Sweden," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 41(4), pages 579-594, December.
    18. Bishop, Kelly C. & Timmins, Christopher, 2019. "Estimating the marginal willingness to pay function without instrumental variables," Journal of Urban Economics, Elsevier, vol. 109(C), pages 66-83.
    19. Nicolai V. Kuminoff & V. Kerry Smith & Christopher Timmins, 2013. "The New Economics of Equilibrium Sorting and Policy Evaluation Using Housing Markets," Journal of Economic Literature, American Economic Association, vol. 51(4), pages 1007-1062, December.
    20. Yinger, John, 2015. "Hedonic markets and sorting equilibria: Bid-function envelopes for public services and neighborhood amenities," Journal of Urban Economics, Elsevier, vol. 86(C), pages 9-25.
    21. Zhang, Congwen & Boyle, Kevin J. & Kuminoff, Nicolai V., 2015. "Partial identification of amenity demand functions," Journal of Environmental Economics and Management, Elsevier, vol. 71(C), pages 180-197.
    22. Patrick Bajari & Jane Cooley Fruehwirth & Kyoo il Kim & Christopher Timmins, 2012. "A Rational Expectations Approach to Hedonic Price Regressions with Time-Varying Unobserved Product Attributes: The Price of Pollution," American Economic Review, American Economic Association, vol. 102(5), pages 1898-1926, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:31:y:2015:i:2:p:281-292. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.