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Title A Retrospective and Prospective Analysis of the Demand for Cheese Varieties in the United States
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University/Publisher Texas A&M University
Abstract The United States cheese consumption has grown considerably over the years. Using Nielsen Homescan panel data for calendar years 2005 and 2006, this dissertation examines the effect of economic and socio-demographic factors on the demand for disaggregated cheese varieties and on the cheese industry in general. In the first essay, we estimated the censored demand for 14 cheese varieties and identified the respective own-price and cross-price elasticities. Also, non-price factors were determined affecting the purchase of each variety as well as the impact of generic dairy advertising. Results revealed that most of the natural cheese varieties have an elastic demand while the processed cheese products exhibited inelastic demands. Strong substitution and complementarity relationships were identified as well, and a two quarter carry-over effect of advertising was observed for most of cheese demands. Results also showed that household demographics affected the demands differently, depending on the nature of the cheese varieties. The second essay examined the impact of retail promotion on the decision to purchase private label processed cheese products using a probit model. A strong negative relationship was found between national brand manufacturer couponing activity and the private label purchase decision. Therefore, national brand couponing appears to be an effective strategy for manufacturers to deter private label growth. This analysis also shows that the decision of purchasing a private label cheese product is influenced by socio-demographic characteristics of the household, namely household income and size, age and education level of the household head, race, ethnicity, and location. In the third study, the feasibility of fortifying processed cheese with omega-3 is investigated. This ex-ante analysis took into account the market conditions and evaluates the increase in the demand for processed cheese needed to offset the costs of fortification in order to maintain the profitability of manufacturers like Kraft. Initially, the censored demand for processed cheese products is estimated using panel data; subsequently, the profitability of manufacturing such product is determined.This analysis shows that, within reasonable market conditions and reasonable marginal costs, the fortification of processed cheese products with omega-3 fatty acids indeed is feasible from a profitability standpoint to manufacturers.
Subjects/Keywords censored demand analysis; cheese products; panel data; Nielsen Homescan data; demand elasticities; demographic and economic factors; private label products; retail promotion; fortification; omega-3 fatty acids; random effect panel tobit; endogenous probit; panel sample selection model with random effects
Contributors Capps, Oral (advisor); Bessler, David A. (committee member); Wu, Ximing (committee member); Ureta, Manuelita (committee member)
Language en
Country of Publication us
Record ID handle:1969.1/ETD-TAMU-2012-05-10745
Repository tamu
Date Retrieved
Date Indexed 2017-09-06
Issued Date 2012-07-16 00:00:00

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…analyses using available data, while the third essay is prospective, investigating potential changes in cheese product attributes. In the first essay, we estimate censored cheese demand relationships using panel data to identify particularly the conditional…

…observations, 35,542 households and 12 monthly purchase periods. Methodology In the first essay, the demand for 14 cheese varieties is examined within an econometric model that recognizes both the panel nature of data and the censored nature of cheese…

…followed to attain each of them. Chapter II focuses on the estimation of the censored demand for 14 U.S. cheese varieties using household panel data. Chapter III examines the impact of retail promotion on the decision to purchase private label processed…

…and offers prospects for future research. 9 CHAPTER II ESTIMATING THE CENSORED DEMAND FOR U.S. CHEESE VARIETIES USING PANEL DATA: IMPACT OF ECONOMIC AND DEMOGRAPHIC FACTORS Background The United States is one of the largest producers of cheese in…

…Cornick and Cox (1994) used household panel data and estimated generalized Tobit system estimator to address the censored 13 nature of expenditure. This study compared the demand of full-fat versus reduced-fat within three cheese categories…

…but used a sample selection model applied to panel data. In the present analysis, the demand for 14 cheese varieties is examined within an econometric model that recognizes both the panel nature of data and the censored nature of cheese purchases over…

…1 4 5 6 7 8 ESTIMATING THE CENSORED DEMAND FOR U.S. CHEESE VARIETIES USING PANAL DATA: IMPACT OF ECONOMIC AND DEMOGRAPHIC FACTORS.............................................................. 9 Background…

…evaluates the increase in the demand for processed cheese needed to offset the costs of fortification in order to maintain the profitability of producers. 6 Source of Data The data used in this dissertation are based on the Nielsen Homescan Panel of U.S…

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