Purchasing behaviour of higher-and lower-income shoppers: a look at breakfast cereals

Abstract

Scanner data for breakfast cereals are used to estimate demand elasticities for six supermarket stores in two distinct socioeconomic areas. Three stores are in lowincome locations and three are in high-income locations. A time series cross-section model is estimated for five product categories across six cross sections over forty-two weeks. Results show lower-income shoppers to have more elastic demands for four of the five product categories: private label cold cereals, the top ten brands of cold cereals, all other brands of cold cereals, and hot cereals. Price is not statistically significant for a fifth product category, snack cereals.