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Demand for Coffee: The Role of Prices, Preferences and Market Power

Author

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  • Durevall, Dick

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

Abstract

The purpose of this paper is to evaluate the role of prices in determining demand for roasted coffee in Sweden. This is of interest because many believe that consumer prices are high relative to green coffee-bean prices, and that lower consumer prices would increase demand for coffee beans. Coffee demand is estimated on data for the period 1968-2002. In the long run, changing preferences appear to determine demand for roasted coffee, and a reduction in consumer prices would only have a temporary impact on consumption. Hence a permanent decrease in consumer prices would only increase exports of coffee beans to Sweden for a couple of years.

Suggested Citation

  • Durevall, Dick, 2005. "Demand for Coffee: The Role of Prices, Preferences and Market Power," Working Papers in Economics 162, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0162
    as

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    References listed on IDEAS

    as
    1. Bettendorf, L. & Verboven, F.L., 1998. "Competition on the Dutch coffee market," Discussion Paper 1998-10, Tilburg University, Center for Economic Research.
    2. Roger Clarke & Stephen Davies & Paul Dobson & Michael Waterson, 2002. "Buyer Power and Competition in European Food Retailing," Books, Edward Elgar Publishing, number 2405.
    3. Bettendorf, L & Verboven, F, 2000. "Incomplete Transmission of Coffee Bean Prices: Evidence from the Netherlands," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 27(1), pages 1-16, March.
    4. Durevall, Dick, 2004. "Competition in the Swedish Coffee Market," Working Papers in Economics 134, University of Gothenburg, Department of Economics.
    5. Feuerstein, Switgard, 2002. "Do coffee roasters benefit from high prices of green coffee?," International Journal of Industrial Organization, Elsevier, vol. 20(1), pages 89-118, January.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Mehta, Aashish & Chavas, Jean-Paul, 2008. "Responding to the coffee crisis: What can we learn from price dynamics?," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 282-311, February.
    2. Mehta, A. & Chavas, Jean-Paul, 2008. "Responding to the Coffee Crisis: What We Can Learn from Price Dynamics," Working Papers 201444, University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group.
    3. Michael S. Webb & Viv B Hall, 2009. "Application Of A Dynamic Panel Data Estimator To Cross-Country Coffee Demand: A Tale Of Two Eras," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 34(1), pages 1-17, June.
    4. Durevall, Dick, 2007. "Competition in the Swedish coffee market, 1978-2002," International Journal of Industrial Organization, Elsevier, vol. 25(4), pages 721-739, August.

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    More about this item

    Keywords

    Coffee exports; Coffee Prices; Market Power; Multinationals; Preferences; Sweden;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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