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Empirical tests of sale theories. Hungarian milk prices

Bakucs, Lajos Zoltán and Fertő, Imre (2015) Empirical tests of sale theories. Hungarian milk prices. Agricultural Economics, 61 (11). pp. 511-521. DOI 10.17221/168/2014-AGRICECON

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Official URL: https://doi.org/10.17221/168/2014-AGRICECON


Abstract

The paper tests various predictions of the sale theory literature, using the retailer specific price data in Hungary. Besides being set in a New Member State, characterised by rather different history of retailing than the established market economies, one of the main innovations of this paper is the comparative assessment of price promotions of two homogenous, every-day products different only with respect to their perishability: one litre boxed and one litre durable fluid milk. Using a battery of empirical techniques from the simple summary statistics, the distribution analysis to the discrete choice models and the co-integration, there is concluded that competing theory predictions on price distributions are not accepted. Also the Hypothesis that manufacturers determine timing of sales is rejected. The results do not confirm that durable goods should have a qualitatively different pricing pattern than perishable products. When the temporal order of sales is considered, the estimations support the Hypothesis of alternate sales. In sum, the predictions of the existing retail sales models only partly confirm certain empirical aspects of price promotions.

Item Type:Article
Uncontrolled Keywords:chain level prices, milk products, price promotion, sale theories
Subjects:Commerce and tourism
Agriculture
Projects:OTKA K-101868
DOI:10.17221/168/2014-AGRICECON
ID Code:2772
Deposited By: Ádám Hoffmann
Deposited On:31 Mar 2017 08:52
Last Modified:31 Mar 2017 08:52

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