Beer snobs do exist: Estimation of beer demand by type
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Date
2014
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Colorado State University
Abstract
Although mass-produced beers still represent the vast majority of U.S. beer sales, there has been a significant growth trend in the craft beer segment. This study analyzes the demand for beer as a differentiated product and estimates own-price, cross-price, and income elasticities for beer by type: craft beer, mass-produced beer, and imported beer. We verify that beer is a normal good with a considerably inelastic demand and also find that the cross-price elasticity across types of beer is close to zero. The results suggest that there are effectively separate markets for beer by type. Copyright 2014 Western Agricultural Economics Association.
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Citation
Journal of Agricultural and Resource Economics; Vol. 39, Núm. 2; pp. 174-187