Abstract

http://ssrn.com/abstract=2460893
 


 



Do Pharmacists Buy Bayer? Sophisticated Shoppers and the Brand Premium


Bart J. Bronnenberg


CentER, Tilburg University

Jean-Pierre H. Dube


University of Chicago - Booth School of Business

Matthew Gentzkow


University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Jesse M. Shapiro


University of Chicago; National Bureau of Economic Research (NBER)

June 1, 2013

Chicago Booth Research Paper No. 14-17

Abstract:     
We estimate the effect of information on consumers’ willingness to pay for branded goods in physically homogeneous consumer packaged goods categories. In a case study of headache remedies, we find that college education, working in a healthcare occupation, and other proxies for product knowledge predict more purchases of private labels relative to brands. Pharmacists devote almost 90 percent of headache remedy purchases to private labels, against 71 percent for the average consumer. The effect of knowledge is similar across a broad set of health products, and in a set of relatively homogeneous food products, but smaller for food and drink products overall. We conclude that a significant share of the willingness to pay for brands in these categories would disappear in a world where consumers were fully informed.

Number of Pages in PDF File: 46

Keywords: branding, private label, painkillers

JEL Classification: D12, D83, L66

working papers series


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Date posted: July 1, 2014  

Suggested Citation

Bronnenberg, Bart J. and Dube, Jean-Pierre H. and Gentzkow, Matthew and Shapiro, Jesse M., Do Pharmacists Buy Bayer? Sophisticated Shoppers and the Brand Premium (June 1, 2013). Chicago Booth Research Paper No. 14-17. Available at SSRN: http://ssrn.com/abstract=2460893 or http://dx.doi.org/10.2139/ssrn.2460893

Contact Information

Bart J. Bronnenberg
CentER, Tilburg University ( email )
Warandelaan 2
Tilburg, 5037 AB
Netherlands
+31 13 466 8939 (Phone)
+31 13 466 8354 (Fax)
Jean-Pierre H. Dube (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 South Woodlawn Avenue
Chicago, IL 60637
United States
HOME PAGE: http://gsb.uchicago.edu/fac/jean-pierre.dube
Matthew Aaron Gentzkow
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Jesse M. Shapiro
University of Chicago ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-834-2688 (Phone)
773-834-8172 (Fax)
HOME PAGE: http://home.uchicago.edu/~jmshapir/
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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