Quality differentiation with flavors: Demand estimation of unobserved attributes
Karina Gallardo R.
Universidad Tecnológica de Bolívar
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This article estimates the demand for mint-flavored gum products using grocery store sales data and accounting for consumers' valuation of quality. Unobserved product attributes, such as flavor quality, are important elements to consider when estimating the demand for gum. The estimation results suggest that gum is an inelastic product. A positive relationship between willingness to pay and unobserved quality was identified, implying that gum industry should be able to command a premium for higher quality mint-flavored products.
This research is funded by USDA-NIFA Specialty Crop Research Initiative Competitive Grant 2009-51181-05790 “Agronomic and Biochemical Impacts of Biotic and Abiotic Stress on Pacific Northwest Flavor Crops.” The study has benefited from comments of Ron Mittelhammer and Martin Kolmar. All remaining errors are the responsibility of the authors. This work was funded by USDA’s National Institute of Food and Agriculture Specialty Crop Research Initiative project, Agronomic and Biochemical Impacts of Biotic and Abiotic Stress on Pacific Northwest Flavor Crops (2009-51181-05790).
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