Variety pass-through: An examination of the ready-to-eat breakfast cereal market

Timothy Richards, Stephen F. Hamilton

Research output: Contribution to journalArticle

15 Citations (Scopus)

Abstract

We examine variety pass-through effects that occur when multiproduct retailers adjust the length of their product lines in response to changes in wholesale prices. Studying variety pass-through is essential to understanding how wholesale price changes transmit into retail prices when variety is endogenous. Using data from the ready-to-eat breakfast cereal category, we find that retailers jointly adjust retail prices and the length of their product lines in response to changes in wholesale prices. We show the importance of controlling for the endogeneity of retailers' product line decisions when calculating price pass-through rates.

Original languageEnglish (US)
Pages (from-to)166-179
Number of pages14
JournalReview of Economics and Statistics
Volume97
Issue number1
DOIs
StatePublished - Mar 1 2015

Fingerprint

examination
market
Pass-through
Wholesale prices
Product line
Retailers
Cereals
Retail prices
Price changes
Endogeneity

ASJC Scopus subject areas

  • Economics and Econometrics
  • Social Sciences (miscellaneous)

Cite this

Variety pass-through : An examination of the ready-to-eat breakfast cereal market. / Richards, Timothy; Hamilton, Stephen F.

In: Review of Economics and Statistics, Vol. 97, No. 1, 01.03.2015, p. 166-179.

Research output: Contribution to journalArticle

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