Home Bias in U.S. Beer Consumption Report as inadecuate




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We apply the Berry, Levinsohn, and Pakes (1995) market equilibrium model to data from 30 brands of beers sold in 12 U.S. cities over 20 quarters (1988-92) to estimate the consumers’ taste for beer characteristics (price, alcohol content, and calories) as well as for the cultural region of origin (USA, Anglo-European, Germanic, and countries bordering the U.S.). Consumer heterogeneity is allowed with respect to age and income. Overall we end up with 7,200 beer brand observations (30x12x20) and 13,920 (58 random draws x 12 x 20) consumer observations. Empirical results indicate that indeed there is home bias with respect to foreign beers. Home bias is less accentuated among older and more affluent individuals.

Keywords: Home bias ; beer ; country of origin ; demand ; differentiated products

Subject(s): Demand and Price Analysis

Issue Date: 2011-08

Publication Type: Working or Discussion Paper

PURL Identifier: http://purl.umn.edu/148292

Total Pages: 15

JEL Codes: D12; F14; L66

Series Statement: Working Papers

004

Record appears in: University of Connecticut > Charles J. Zwick Center for Food and Resource Policy > Working Paper series





Author: Lopez, Rigoberto ; Matschke, Xenia

Source: http://ageconsearch.umn.edu/record/148292?ln=en







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