Vol. 1 No. 3 (2012): Towards a Sustainable Bio-economy: economic issues and policy challenges
Full Research Articles

Product Differentiation and Brand Competition in the Italian Breakfast Cereal Market: a Distance Metric Approach

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  • Paolo Sckokai,
  • Alessandro Varacca
Paolo Sckokai
Istituto di Economia agro-alimentare Università Cattolica del Sacro Cuore Via Emilia Parmense, 84 29122 Piacenza ITALY
Alessandro Varacca
Istituto di Economia agro-alimentare Università Cattolica del Sacro Cuore Via Emilia Parmense, 84 29122 Piacenza ITALY
DOI: https://doi.org/10.13128/BAE-11148

Published 2012-12-30

Keywords

  • distance metric,
  • almost ideal demand system,
  • breakfast cereals

How to Cite

Sckokai, P., & Varacca, A. (2012). Product Differentiation and Brand Competition in the Italian Breakfast Cereal Market: a Distance Metric Approach. Bio-Based and Applied Economics, 1(3), 297–312. https://doi.org/10.13128/BAE-11148
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Abstract

This article employs a nation-wide sample of supermarket scanner data to study product and brand competition in the Italian breakfast cereal market. A modified Almost Ideal Demand System (AIDS), that includes Distance Metrics (DMs) as proposed by Pinkse, Slade and Brett (2002), is estimated to study demand responses, substitution patterns, own-price and cross-price elasticities. Estimation results provide evidence of some degree of brand loyalty, while consumers do not seem loyal to the product type. Elasticity estimates point out the presence of patterns of substitution within products sharing the same brand and similar nutritional characteristics.
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