Brand Price Elasticities with Tobit Censored Regression in the U.S. Seafood Products

초록

Using store-level scanner data representing three seafood products (shrimp, salmon, and tilapia) in the U.S., we estimate brand specific price elasticities. In order to avoid the main drawback of the scanner data, such as zero sales or purchases, the Tobit censored model is utilized. Based on the findings, price elasticities of the selected brands in shrimp, salmon and tilapia correspond to sales shares of a particular brand. Store brands dominate market sales for the chosen seafood products. For shrimp, among four brands, the three selected brands are elastic while one brand is inelastic. For salmon, own-price elasticity of a store brand is inelastic indicating that the store brand plays major role in retailer brand-building. For tilapia, however, the own-price elasticity of the store brand is unexpected to have a positive sign, implying that the shifting of the demand curve to the right. Such phenomenon is related to the increases in people’s purchase. These findings would provide insights to researchers and practitioners in need of research to improve marketing strategies and to understand consumers’ sensitivity to price changes.

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