JOURNAL ARTICLE

Dynamic Pricing and Organic Waste Bans: A Study of Grocery Retailers' Incentives to Reduce Food Waste.

  • Published In: Marketing Science (INFORMS), 2024, v. 43, n. 2. P. 289 1 of 3

  • Database: Business Source Ultimate 2 of 3

  • Authored By: Sanders, Robert Evan 3 of 3

Abstract

This article analyzes the welfare effects of two policy interventions aimed at reducing grocery-retail food waste: dynamic pricing and organic waste landfill bans. Using a structural econometric model calibrated with detailed sales, perishability, and cost data from a Midwestern grocery chain’s artisanal bread category, the study finds that dynamic pricing reduces waste by about 21% while increasing retailer gross margins by 3% and consumer surplus by 0.3%. In contrast, simulating an organic waste ban as a ten-fold increase in disposal costs reduces waste by only 4% and decreases both profits and consumer welfare. The findings suggest that regulators seeking to reduce grocery-store food waste should prioritize incentivizing dynamic pricing adoption over imposing organic waste landfill bans, as the latter have limited impact on waste reduction and may be economically distortionary.

Additional Information

  • Source:Marketing Science (INFORMS). 2024/03, Vol. 43, Issue 2, p289
  • Document Type:Article
  • Subject Area:Nutrition and Dietetics
  • Publication Date:2024
  • ISSN:0732-2399
  • DOI:10.1287/mksc.2020.0214
  • Accession Number:176098470
  • Copyright Statement:Copyright of Marketing Science (INFORMS) is the property of INFORMS: Institute for Operations Research & the Management Sciences and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

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