Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/230152 
Year of Publication: 
2020
Citation: 
[Journal:] Australian Journal of Agricultural and Resource Economics [ISSN:] 1467-8489 [Volume:] 64 [Issue:] 4 [Publisher:] Wiley [Place:] Hoboken, NJ [Year:] 2020 [Pages:] 1184-1209
Publisher: 
Wiley, Hoboken, NJ
Abstract: 
This paper investigates the impact of product differentiation on firm-specific and industry-wide cost pass-through in grocery retailing. We use attribute distance measures to model product differentiation based on a unique set of retail scanner data for ready-to-eat soup products in the Canadian market. Results from a panel error correction model suggest that product differentiation explains a significant share of the variation in the rate of cost pass-through across products. More differentiated products are associated with lower rates of cost pass-through of industry-wide and higher pass-through of firm-specific costs shocks. The findings validate an oligopolistic model of product differentiation, where firms use differentiation as a non-price competitive factor in strategic pricing decisions.
Subjects: 
cost pass‐through
non‐price competition
product differentiation
industry‐wide costs
firm‐specific costs
food retail markets
ready‐to‐eat soups
Canada
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article
Document Version: 
Published Version

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