Valuation of new products in attribute space

Geoffrey M. Pofahl, Timothy Richards

Research output: Contribution to journalArticle

12 Scopus citations

Abstract

We contribute to the literature on new product valuation by presenting a model of new product introduction based on the distance metric (DM) approach of Pinkse, Slade, and Brett (2002) . Models based on the DM approach are capable of dealing with highly differentiated food categories that are often responsible for the lion's share of new product activity. Furthermore, since new products are typically characterized by differences in observable attributes, the DM approach is appropriate in that it directly accounts for such differences. Our findings reveal that consumers benefit from new products even when the number of alternatives is already high.

Original languageEnglish (US)
Pages (from-to)402-415
Number of pages14
JournalAmerican Journal of Agricultural Economics
Volume91
Issue number2
DOIs
StatePublished - Apr 21 2009

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Keywords

  • Compensating variation
  • Demand systems
  • Distance metric
  • Fruit juice
  • New products
  • Product differentiation
  • Retailing

ASJC Scopus subject areas

  • Agricultural and Biological Sciences (miscellaneous)
  • Economics and Econometrics

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