Which Brands Gain Share from Which Brands? Inference from Store-Level Scanner Data

Abstract:     
Market share models for weekly store-level data are useful to understand competitive structures by delivering own and cross price elasticities. These models can however not be used to examine which brands lose share to which brands during a specific period of time. It is for this purpose that we propose a new model, which does allow for such an examination. We illustrate the model for two product categories in two markets, and we show that our model has validity in terms of both in-sample fit and out-of-sample forecasting. We also demonstrate how our model can be used to decompose own and cross price elasticities to get additional insights into the competitive structure.

Number of Pages in PDF File: 50

Keywords: Competitive structure, elasticity decomposition, market shares, share-switching, store-level scanner data

JEL Classification: C10, C51, C53, M31

working papers series