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of 20 percent would result in an expected increase in volume of 40 percent, which is double the original example. The elasticity curve is typically not straight.”
She says asparagus is a perfect example, with the curve of its regression model shaped more like a “hockey stick.”
“For most retailers when bunched, green asparagus is priced below $2.99/bunch, it’s relatively elastic,” she says. “The difference in sales volume when priced at $1.99/ bunch is double, but when priced above
that $2.99 mark, volume remains flat.
“If you are planning to put your retail price at $2.99/bunch, why not price it a little higher and improve profits? It’s unlikely
to impact movement.”
Garven emphasizes price elasticity
“absolutely changes over time.”
“For highly seasonal items, like water-
melon or corn, the way shoppers respond to prices through the summer months looks very different to how they respond in the winter months,” she says.
“What we found is that if you decrease or increase the price we see more effect on the number of people buying mangos than on the amount of mangos that each consumer buys.”
— Leonardo Ortega, National Mango Board
“We have been monitoring consumers since 2008. We interview approximately 1,000 consumers every month, and we ask them about mango consumption from the past two weeks,” says Ortega. “According to our data and the analysis done by Dr. Ronald Ward from the Univer- sity of Florida, the price elasticity that we have is -1.6 – that means it’s elastic.”
This estimate comes from more than 100,000 data points taken through to 2017, and the research is ongoing.
“I mentioned the average elasticity but the elasticity is not a straight line. And this can go from -1.3 to -1.8, depending on the price,” says Ortega.
“For example, when we went from $0.70 per mango to $1.40 per mango, it started with an elasticity of -1.38, and when the price doubled the elasticity would be -1.8.”
As the NMB has such a strong data set, it also calculates elasticity as it pertains to market penetration and intensity.
“The market penetration is the percentage of people buying mangos, and the market intensity is the amount of mangos that each person buys,” he says. “What we found is that if you decrease or increase the price we see more effect on the number of people buying mangos than on the amount of mangos that each consumer buys.”
Garven from Robinson Fresh echoes these observations about changing elastic- ities along the demand curve.
“It’s common to describe price elasticity outputs simply in this way: ‘With a decrease in the price of 10 percent, an increase in volume of 20 percent is expected.’ While it’s sometimes true that the inverse works, it is not safe to assume it is that way always,” she says.
“You also cannot simply assume that given this statement a decrease in price
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