An applied analysis of brand demand structure

Abstract

The demand literature is concerned with the optimal allocation of expenditure at varied but usually high levels of commodity aggregation. Much less aggregation however is required for business applications. In applied business settings, interest centres upon the different brands of the same commodity because policy formulation takes place at the level of the individual brand. This paper considers application of formal demand analysis to brand demand data. A theoretically plausible demand system is invoked to describe inter-brand allocation of expenditure, test restrictions imposed by economic theory and yield empirically determined insights into brand demand structure.