Generic Brands and Product Choice--论文代写范文精选

在收入水平上异质性表明,随着经济形势恶化，提出替换存储。证据表明,消费者购买的品牌，当天然气价格上升时发生变化。阿根廷比索币贬值造成的收入冲击引起了品牌声誉变化。下面的paper代写范文进行详述。

Abstract
Product choice creates a well known bias in standard price indices. Consider, for example, an increase in price. A standard index measures the difference in prices times the initial period quantities. Such an index overstates the change in utility since it ignores the changes in quantities in response to the price increase. For example, Boskin et al (1998) suggest “that this source of 24 substitution bias … leads to a combined substitution bias of 0.4 percentage points per year in using the CPI to measure changes in the cost of living.” In principle, the problem can be handled by using a weighted average of the two period quantities (Diewert, 1976). Indeed, this, among other reasons, has led some researchers to claim that this is a second order problem (Hausman, 2003).

To provide a point of comparison to this literature we look in our data at this form of substitution. In order to keep the empirical exercise tractable below we will focus on substitution towards store (‘generic’) brands.9 As we will show below, the fraction of store brands varies across households and over products. Heterogeneity across income levels presented suggests that there is substitution towards store brands as economic conditions worsen. Gicheva, Hastings and Villas-Boas (2007) provide evidence that consumers buy more store brands when gas prices go up. Caronia (2008) finds that the income shock caused by the Argentinean 2002 Peso devaluation caused a flight from branded products towards store brands.

How much do households buy store brands? 
In the UK store brands are more popular and are often of higher quality than US store brands. The data allow us to distinguish between ‘economy’ and ‘standard’ store brands. Economy brands are most similar to generic brands in the US. Figure 5a shows the share of household expenditure on economy items, ranging from 0 to 100% with an average of 3.8%. Figure 5b shows how ‘standard’ store brands are much more popular, also ranging from 0 to 100% but averaging 41%. Families with children spend more on economy brands, as do households on lower incomes. However, families with children are less likely to buy standard brands suggesting some substitutability between them.

What are the implications of substitution towards store brand for price indices? 
If prices of the store brand are collected regularly, as part of the basket then the usual substitution bias applies – the key issue is what quantity weight is used to weight the store brand prices. However, if the store brand prices are not collected regularly, as is the case for many food items, then the shift towards the cheaper products will be mostly missed by standard price indices. In the UK, for most food items, there is no particular instruction to collect branded or own brand products when sampling prices (one exception is sliced bread where only branded items can be chosen). Product choice is at the discretion of the price collector (the Consumer Price Index Technical Manual (ONS, 2007) suggests that the product selected should be “…representative of what people buy in your area from all products matching the specification of each item to be priced in that outlet.” (page 21)). 

Without access to the raw price data collected by ONS it is not clear whether branded products are over- or under-sampled in the UK food price index. It is likely that ‘representative’ items may well be branded more often than not: the guidance given on the sorts of products to collect sometimes specifies particular branded products that match the item description (in breakfast cereals, butter and soft drinks, for example) which might to those products being sampled. Confectionery is the only example where specific branded products are explicitly priced (KitKat, Polo Mints, Smarties, Mars Bar, Fruit Pastilles, Crunchie, Dairy Milk) with no opportunity to price own brand alternatives. In some cases, ‘economy’ own brands are explicitly ruled out (for example for canned goods, condiments and ready meals) but these can sometimes make up a substantial share of spending and may be obvious substitutes when economic conditions worsen or relative prices shift.

Probably the largest change over the last decade in food retailing in the US and the UK is the increase of the market share of a single firm: Walmart in the US and Tesco in the UK. Walmart is the largest food retailer in the US, with sales higher than Kroger, Supervalu-Albertsons and Safeway, which are the largest supermarket chains. In the UK Tesco has similarly gained market share rapidly. The Competition Commission (2008) reports the Tesco grocery sales share increasing from 20.2% in 2002 to 27.6% in 2007. Based on slightly different data, TNS (2008) reported a Tesco grocery market share for August 2008 of 31.6%. However, as we show below, the fraction of expenditure in Tesco varies considerably across households and over products. The implications of outlet substitution have been well documented (for example, see Boskin et al, 1998, Hausman, 1998, Hausman and Leibtag, 2004). In the US the way that prices are collected does not fully capture price changes in retailers like Walmart, or they do not properly account for quality differences (treating the price difference as purely a quality difference). The situation is somewhat different in the UK where the ONS does attempt to reflect these changes in market share.(论文代写)

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