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Modelling asymmetric consumer demand response: Evidence from scanner data

Vespignani, Joaquin L. (2012): Modelling asymmetric consumer demand response: Evidence from scanner data.

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Abstract

We used scanner data to test whether two competitive commodities respond symmetrically by volume to price changes. Our results indicate that consumers of the most expensive good (Coca-Cola) respond quite symmetrically when prices go either up or down. In contrast, consumers of the less expensive good (Pepsi-Cola) respond quite asymmetrically. We also introduce the substitution effect in ARDL asymmetric modelling as scanner data permits, showing that most previous asymmetric models using this technique experience omitted variables since this parameter is excluded.

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