Quantity Surcharges on Groceries

A quantity surcharge exists when the unit cost of a given brand is higher for a large-size package than for a smaller one. This paper examines some product and household characteristics that influence observed quantity surcharging practices. Results indicate that the propensity to buy a large-size package of a product is positively influenced by the extent of a household's usage of that product, procurement cost, and carrying capacity, and is negatively influenced by the propensity to price search. A retailer's decision to levy a quantity surcharge is, in turn, influenced by the demand for the product, the propensity to buy large-size packages, and to some extent the product's carrying cost.


Issue Date:
1994
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/25179
Total Pages:
17
Series Statement:
Research Report No. 24




 Record created 2017-04-01, last modified 2017-04-04

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