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Consumer Choices and Welfare Gains from New, Healthy Products: A Virtual Price Approach


  • Huffman, Sonya Kostova
  • Ishdorj, Ariun
  • Jensen, Helen H.


This paper models consumer food choices with respect to different margarine and spread brands that include a new healthy brand. The results show that the older and smaller size households with higher income and higher education are more likely to purchase the healthy brand. An Almost Ideal Demand System for six brands was estimated and the coefficients were used to calculate price and brand expenditure elasticities in order to examine the responsiveness of the consumers to economic variables.

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  • Huffman, Sonya Kostova & Ishdorj, Ariun & Jensen, Helen H., 2005. "Consumer Choices and Welfare Gains from New, Healthy Products: A Virtual Price Approach," 2005 Annual meeting, July 24-27, Providence, RI 19351, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea05:19351

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    References listed on IDEAS

    1. Brian W. Gould, 1998. "Factors Affecting the Timing of Purchasing of Butter, Margarine, and Blends: A Competing Goods Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(4), pages 793-805.
    2. Grossman, Michael, 1972. "On the Concept of Health Capital and the Demand for Health," Journal of Political Economy, University of Chicago Press, vol. 80(2), pages 223-255, March-Apr.
    3. Sonya Kostova Huffman & Stanley Johnson, 2002. "Re-evaluation of Welfare Changes during the Transition in Poland," Post-Communist Economies, Taylor & Francis Journals, vol. 14(1), pages 31-46.
    4. Robert C. Feenstra & Matthew D. Shapiro, 2003. "Scanner Data and Price Indexes," NBER Books, National Bureau of Economic Research, Inc, number feen03-1, January.
    5. Amil Petrin, 2002. "Quantifying the Benefits of New Products: The Case of the Minivan," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 705-729, August.
    6. Sonya Kostova Huffman & Stanley R. Johnson, 2004. "Impacts of Economic Reform in Poland: Incidence and Welfare Changes Within a Consistent Framework," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 626-636, May.
    7. 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.
    8. Chern, Wen S & Loehman, Edna T & Yen, Steven T, 1995. "Information, Health Risk Beliefs, and the Demand for Fats and Oils," The Review of Economics and Statistics, MIT Press, vol. 77(3), pages 555-564, August.
    9. Neary, J. P. & Roberts, K. W. S., 1980. "The theory of household behaviour under rationing," European Economic Review, Elsevier, vol. 13(1), pages 25-42, January.
    10. Jerry A. Hausman, 1997. "Valuing the Effect of Regulation on New Services in Telecommunications," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1997 Micr), pages 1-54.
    11. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    12. W. Erwin Diewert, 2003. "Hedonic Regressions. A Consumer Theory Approach," NBER Chapters,in: Scanner Data and Price Indexes, pages 317-348 National Bureau of Economic Research, Inc.
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