Assessing Price Elasticity for Private Labels and National Brands: Differences by Income and Store Location

30 Pages Posted: 17 May 2006

See all articles by Min Huang

Min Huang

Ohio State University

Eugene Jones

Ohio State University

David E. Hahn

Ohio State University

Robert P. Leone

Texas Christian University - M.J. Neeley School of Business

Date Written: March 2006

Abstract

Previous studies have been inconclusive as to whether national brands have greater or smaller price elasticities than private labels. This paper examines consumers' price sensitivity for private labels and national brands within different socioeconomic environments and investigates how socioeconomic status impacts price response to private and national brands. An AIDS model is developed and used to measure price elasticities for seven product categories that are sold in six stores. These stores are selected from geographic areas that are populated by higher- and lower-income consumers. Results show that national brands have larger price elasticities than private labels, particularly in lower-income areas.

Keywords: pricing, private labels, marketing

Suggested Citation

Huang, Min and Jones, Eugene and Hahn, David E. and Leone, Robert P., Assessing Price Elasticity for Private Labels and National Brands: Differences by Income and Store Location (March 2006). Fisher College of Business Working Paper No. 2006-01-004. Available at SSRN: https://ssrn.com/abstract=901787 or http://dx.doi.org/10.2139/ssrn.901787

Min Huang

Ohio State University ( email )

Blankenship Hall-2010
901 Woody Hayes Drive
Columbus, OH OH 43210
United States

Eugene Jones

Ohio State University ( email )

Blankenship Hall-2010
901 Woody Hayes Drive
Columbus, OH OH 43210
United States

David E. Hahn

Ohio State University ( email )

Blankenship Hall-2010
901 Woody Hayes Drive
Columbus, OH OH 43210
United States

Robert P. Leone (Contact Author)

Texas Christian University - M.J. Neeley School of Business

Fort Worth, TX 76129
United States

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