A Demand Systems Analysis for Cheese Varieties Using a Balanced Panel of US Designated Market Areas over the Period 2018 to 2020

By: Bakhtavoryan, Rafael; Capps, Jr., Oral
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Bakhtavoryan, Rafael; Capps, Jr., Oral, A Demand Systems Analysis for Cheese Varieties Using a Balanced Panel of US Designated Market Areas over the Period 2018 to 2020, Journal of Agricultural and Resource Economics, Volume 49, Issue 2, May 2024, Pages 203-220

An Exact Affine Stone Index model is estimated to capture demand interrelationships among Muenster, Mozzarella, Colby, Cheddar, Swiss, other natural, specialty/imported, and processed cheese. A balanced panel constructed from designated market areas and quarterly periods from 2018 to 2020 derived from Nielsen is used. The demand for Muenster, Cheddar, Swiss, and specialty/imported cheese is unitary elastic, while the demand for Mozzarella, Colby, other natural cheese, and processed cheese is inelastic. All varieties are necessities, and substitution relationships are predominant. Demographic characteristics impact the demand for these cheese varieties. Retail pricing strategies designed to maximize total sales are provided.