Regional variability of price and expenditure elasitcities: The case of spaghetti sauces

Abstract

Using IRI Infoscan data for six brands of spaghetti sauce and employing the Rotterdam model, estimates were obtained for own-price, cross-price, and total expenditure elasticities for 43 market areas of the United States. Variability of own-price, cross-price, and expenditure elasticities across different regions was evident, particularly for the own-price elasticities. Manufacturers may use our results to conduct appropriate pricing and promotion strategies by market and region. © 1997 John Wiley & Sons, Inc.