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Discount Usage and Price Discrimination for Pork Products in Canada
Author(s) -
Vyn Richard J.,
Hailu Getu
Publication year - 2015
Publication title -
canadian journal of agricultural economics/revue canadienne d'agroeconomie
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 37
eISSN - 1744-7976
pISSN - 0008-3976
DOI - 10.1111/cjag.12090
Subject(s) - price elasticity of demand , panel data , welfare economics , economics , price discrimination , business , econometrics , microeconomics
This paper examines the effects of demographic and location variables on usage of various types of discounts (e.g., coupons, price cuts, and store membership discounts) and compares the price elasticities of demand for pork products for users and nonusers of various types of discounts. We use Ipsos‐Reid's Consumer Panel of Canada weekly household data across Canada over a one‐year period. We find that the effect of demographic and location variables on discount usage is discount‐type specific. For many pork products, the price elasticity of demand is higher for users of discounts than for nonusers. The results also indicate variation across discount types in the ability to price discriminate for specific pork products. For example, coupons and price cuts are more effective price discrimination tools than store membership discounts for processed pork products. These results suggest that retailers should be strategic with the types of discounts used to most effectively price discriminate across a variety of pork products.