nep-mkt New Economics Papers
on Marketing
Issue of 2017‒06‒18
four papers chosen by
João Carlos Correia Leitão
Universidade da Beira Interior

  1. Private labels : The brands of the future By Keller, Kristopher
  2. The Effect of Information Salience on Product Quality: Louisville Restaurant Hygiene and By Makofske, Matthew
  3. Willingness to Pay for Low Water Footprint Food Choices During Drought By Hannah Krovetz; Rebecca Taylor; Sofia Villas-Boas
  4. How Much Product Variety is Required? Evidence from the Movie Theater Market By In Kyung Kim

  1. By: Keller, Kristopher (Tilburg University, School of Economics and Management)
    Abstract: This dissertation consists of three essays that study private labels’ evolution from private labels as brand class to individual private-label brands from three different perspectives. In the second chapter of this dissertation (essay 1), I study the antecedents and performance implications of retailer’s decisions whether to attach their name to a private-label tier or develop a stand-alone brand name. In the third chapter (essay 2), mirroring the contention that it “is easier to build equity in a single brand,” I study retailers’ occasional practice of rebranding private-label tiers from multiple, category-specific private labels to one umbrella brand across product categories and its effects on the brand’s strength, marketing effectiveness as well as the marketing-mix setting (marketing conduct). Finally, in the fourth chapter (essay 3), I document retailers’ increasing practice to launch more and more unique private label SKUs, historically a forte of national brands, and assess to what extent unique new private label SKUs help in growing a category vis-à-vis unique new national brand SKUs.
    Date: 2017
  2. By: Makofske, Matthew
    Abstract: In late June 2013, the city of Louisville, Kentucky, announced plans to provide restaurant health inspection data to for publication on their popular online consumer-review forum. These data were already publicly available on the city's website. I utilize this partnership to test whether an increase in the salience of disclosed quality information on a particular product attribute, induces sellers to improve product quality along that dimension. Consumers use Yelp to gather information on many characteristics of a restaurant's product. Consumers depend less on Yelp to learn about chain-affiliated restaurants, because much of this information is conveyed through the chain's reputation. Using data from over 11,000 Louisville restaurant health inspections, I compare health inspection performance for independent and chain-affiliated restaurants, before and after the announcement of the partnership. Controlling for a variety of factors, I estimate that this increased salience caused substantial improvement in independent restaurant hygiene. The average treatment effect is estimated to be a 12-14% decrease in health score point deductions, and a 29-37% decrease in critical violations (those deemed to be the greatest public health risk), per inspection. The effect of the Louisville-Yelp partnership on health score point deductions is entirely evident in restaurants' first inspections following its announcement, where the estimated effect is a 14-16% relative decrease.
    Keywords: cost of information acquisition, salience, mandatory disclosure, product quality, restaurant hygiene
    JEL: I18 K32 L15
    Date: 2017–01–13
  3. By: Hannah Krovetz; Rebecca Taylor; Sofia Villas-Boas
    Abstract: In the context of recent California drought years, we investigate empirically whether consumers are willing to pay for more efficient water usage in the production of four California agricultural products. We implement an internet survey choice experiment for avocados, almonds, lettuce, and tomatoes to elicit consumer valuation for water efficiency via revealed choices. We estimate a model of consumer choices where a product is defined as a bundle of three attributes: price, production method (conventional or organic), and water usage (average or efficient). Varying the attribute space presented to consumers in the experimental choice design gives us the data variation to estimate a discrete choice model—both conditional logit specifications and random coefficient mixed logit specifications. We find that on average consumers have a significant positive marginal utility towards water-efficiency and estimate that there is an implied positive willingness to pay (WTP) of about 12 cents per gallon of water saved on average. Moreover, informing consumers about the drought severity increases the WTP for low water footprint options, but not significantly. We find that there is heterogeneity in the WTP along respondents' education, race, and also with respect to stated environmental concern. Our findings have policy implications in that they suggest there to be a market based potential to nudge consumers who want to decrease their water footprint and follow a more sustainable diet, namely, by revealing information on the product's water footprint in a form of a label. Simulations of removing low water footprint labels from the choice set attributes imply significant consumer surplus losses, especially for the more educated, white, and more environmentally concerned respondents.
    JEL: Q18 Q25 Q54 Q51 Q21 M30
    Date: 2017–06
  4. By: In Kyung Kim (Department of Economics, Nazarbayev University)
    Abstract: This paper empirically investigates the effect of the entry of new theaters on the number of movies playing in incumbent theaters and in the market as a whole, as well as its effect on consumer welfare via the change in product variety and availability. Estimation results suggest that whereas the entry of competitors to a market does not affect the number of movies playing in a theater, the total number of movies playing in the market increases after the entry of new theaters. These findings imply that a theater offers a movie lineup different from those of rivals in order to ease competition, which leads to an increase in market-wide movie variety. We also find robust evidence that the net effect of increased movie variety in the market after the entry of new theaters on consumer welfare is non-monotonic; it is positive only for the first few entrants to a monopoly market.
    Keywords: product variety, consumer welfare, movie theater industry
    JEL: L13 L22 L82
    Date: 2017–06

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