QUANTIFYING THE EFFECTS OF NEW PRODUCT DEVELOPMENT - THE CASE OF LOW-FAT GROUND-BEEF

Low-fat ground beef (LFGB) is a new product designed to be as palatabl e as beef products that contain significantly higher levels of fat. A hedonic model shows that each unitary increase in the leanness of grou nd beef products carries a price premium of $.0206/lb. If LFGB garners a 10% share of the ground beef market, the retail price of all ground beef products will increase by $.01/lb. and consumption will increase by 39.75 million lbs. The price of commercial cows will increase by $ .56/cwt. Price, quantity, and welfare measures are magnified as the ma rket share captured by LFGB increases.