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Many believe that fast food promotion is a significant cause of the obesity epidemic in North America. Industry members argue that promotion only reallocates brand shares and does not increase overall demand. This study weighs into the debate by specifying and estimating a discrete/continuous model of fast food restaurant choice and food expenditure that explicitly accounts for both spatial and temporal determinants of demand. Estimates are obtained using a unique panel of Canadian fast food consumers. The results show that promotion primarily increases demand and has very little effect on restaurant market shares.

Keywords: consumer demand ; discrete choice ; fast food ; pricing strategy ; promotion ; spatial modeling

Subject(s): Demand and Price Analysis


Issue Date: 2007

Publication Type: Working or Discussion Paper

PURL Identifier:

Total Pages: 37

JEL Codes: C25; D12; I18; L66; M31

Series Statement: CMD 07-03; Project Report

Record appears in: University of Alberta > Department of Resource Economics and Environmental Sociology (REES) > Consumer and Market Demand Network Papers

Autor: Richards, Timothy J. ; Padilla, Luis


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