Organic Labeling, Private Label, and U.S. Household Demand for Fluid Milk
29 Pages Posted: 17 Apr 2017 Last revised: 19 Dec 2017
Date Written: November 26, 2016
The U.S. fluid milk market has been experiencing two trends in the recent decade: the fast growth of private label milk and organic milk. Using the latest Nielsen Consumer Panel Dataset, we estimate a censored demand system to study the demand relations among types of milk differentiated by brand types and organic status. We find that sociodemographic factors still play important roles in household choice of milk types, and fluid milk, as a whole, is an inferior good. Moreover, as income increases, households are more likely to shift from buying conventional milk to organic milk and from private label conventional milk to branded conventional milk, as indicated by the asymmetric cross price elasticities. Corresponding implications for milk producers and marketers are discussed.
Keywords: private label, organic, milk, censored demand system, elasticities
JEL Classification: Q11, D12
Suggested Citation: Suggested Citation