In the new academic study “Do Pharmacists Buy Bayer? Informed Shoppers and the Brand Premium” economists Bart J. Bronnenberg, CentER and Tilburg; Jean-Pierre Dubé, Chicago Booth and NBER; Matthew Gentzkow, Chicago Booth and NBER and Jesse M. Shapiro, Chicago Booth and NBER look at informed shoppers and their brand buying habits.
According to the team pharmacists and doctors are more likely than the average consumer to buy private brand medicine. And chefs are more likely than the average consumer to buy private brand food.
The paper’s conclusion states their findings very clearly
“Across a range of products we find strong evidence that more informed shoppers buy more store brands and fewer national brands. In many categories the estimated effects are economically large, a claim that we sharpen by looking at the data through the lens of a stylized model of demand and price setting.
Our study is limited to examining the effects of information only on quantities and prices. If consumers were to become more informed, markets would adjust on other margins as well. In particular, a more informed population of consumers might change the incentive to advertise, or to introduce particular products in the first place. Taking account of these forms of dynamic adjustment, and examining their implications for welfare, is an important priority for future work.”