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Quantity Surcharges on Groceries

Author

Listed:
  • Agrawal, Jagdish
  • Grimm, Pamela E.
  • Srinivasan, Narasimhan

Abstract

A quantity surcharge exists when the unit cost of a given brand is higher for a large-size package than for a smaller one. This paper examines some product and household characteristics that influence observed quantity surcharging practices. Results indicate that the propensity to buy a large-size package of a product is positively influenced by the extent of a household's usage of that product, procurement cost, and carrying capacity, and is negatively influenced by the propensity to price search. A retailer's decision to levy a quantity surcharge is, in turn, influenced by the demand for the product, the propensity to buy large-size packages, and to some extent the product's carrying cost.

Suggested Citation

  • Agrawal, Jagdish & Grimm, Pamela E. & Srinivasan, Narasimhan, 1994. "Quantity Surcharges on Groceries," Research Reports 25179, University of Connecticut, Food Marketing Policy Center.
    • Handle: RePEc:ags:uconnr:25179
    DOI: 10.22004/ag.econ.25179
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    References listed on IDEAS

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    Keywords

    Agribusiness; Demand and Price Analysis;

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