Behavioral Consumer Reactions to Product Size Changes

This study examines package size changes. It has two empirical parts: first, we exploit supermarket scanner data by developing an algorithm to identify size changes, which allows us to provide novel descriptive statistics and study how consumer respond to size and price changes. Second, we conduct an online experiment to investigate whether consumers respond differently to these two types of changes and to test whether different ways of displaying information causally affect consumer decisions. We also examine how package size changes affect the welfare of different groups of consumers and discuss how our results relate to different public policies. The empirical analyses are guided and complemented by theoretical models.