Assessing the Competitive Interaction between Private Labels and National Brands

Posted: 1 Dec 1999

See all articles by Ronald W. Cotterill

Ronald W. Cotterill

University of Connecticut - Department of Agricultural and Resource Economics

William P. Putsis

London Business School

Ravi Dhar

Yale School of Management - International Center for Finance

Abstract

In this article, we employ the Linear Approximate Almost Ideal Demand System (LA/AIDS), and specify price reaction equations derived under the LA/AIDS specification. We perform intracategory analyses using data on six individual categories, as well as a pooled analysis on a sample of 125 categories and 59 geographic markets. We find that consumer response to price and promotion decisions (demand) and firm pricing behavior (supply) jointly determine observed market prices and market shares. Further, estimates of residual demand elasticities suggest that examination of partial demand elasticities alone may provide an incomplete picture of the ability of brands to raise price.

JEL Classification: L10, L11

Suggested Citation

Cotterill, Ronald W. and Putsis, William P. and Dhar, Ravi, Assessing the Competitive Interaction between Private Labels and National Brands. Journal of Business, Vol. 73, No. 1, January 2000. Available at SSRN: https://ssrn.com/abstract=193973

Ronald W. Cotterill

University of Connecticut - Department of Agricultural and Resource Economics ( email )

1376 Storrs Road, Unit 4066
Storrs, CT 06269
United States

William P. Putsis (Contact Author)

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
44-0-171-706-6733 (Phone)
44-0-171-724-1145 (Fax)

Ravi Dhar

Yale School of Management - International Center for Finance ( email )

Box 208200
New Haven, CT 06520-8200
United States

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