Cross-price elasticity: telling real rivals from shelf neighbours
Two competitors on the shelf next to you. One of them is a rival. The other one just sells nearby, and this chart is how you tell them apart.
Competitor A: cross-elasticity 0.49, with a 95% interval from 0.37 to 0.61. When their price goes up 1%, your volume goes up about half a percent. That is a substitute, and it is the brand you are actually competing with.
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