QUANTIFYING THE EFFECTS OF NEW PRODUCT DEVELOPMENT: THE CASE OF LOW-FAT GROUND BEEF
By: Brester, Gary W.; Lhermite, Pascale; Goodwin, Barry K.; Hunt, Melvin C.
Brester, Gary W.; Lhermite, Pascale; Goodwin, Barry K.; Hunt, Melvin C., QUANTIFYING THE EFFECTS OF NEW PRODUCT DEVELOPMENT: THE CASE OF LOW-FAT GROUND BEEF, Journal of Agricultural and Resource Economics, Volume 18, Issue 2, December 1993, Pages 239-250
Low-fat ground beef (LFGB) is a new product designed to be as palatable as beef products that contain significantly higher levels of fat. A hedonic model shows that each unitary increase in the leanness of ground beef products carries a price premium of $.0206/lb. If LFGB garners a 10% share of the ground beef market, the retail price of all ground beef products will increase by $.01/lb. and consumption will increase by 39.75 million lbs. The price of commercial cows will increase by $.56/cwt. Price quantity, and welfare measures are magnified as the market share captured by LFGB increases.