Examining Demand Elasticities in the U.S. Differentiated Yogurt Market

Abstract

This article applies the Quadratic Almost Ideal Demand system (QUAIDS) model to households’ weekly purchases of yogurt augmented with household characteristics to analyze consumer choices and estimate demand elasticities in the U.S. differentiated yogurt market after the introduction of Chobani brand in 2005. Results show that households with a college degree are more likely to purchase Chobani and Dannon brands rather than Yoplait and private labels. Except for Dannon, demand is price elastic, while the new brand of Chobani has a higher elastic demand compared to the Yoplait brand. Branded yogurts are expenditure elastic with the highest magnitude for Chobani among brands.