Limitations to crossed elasticity studies

One of these extraneous factors is that we are looking at a case where plant-based is basically at price parity. It goes from near price parity to price parity. If you go from a 20-pence surcharge to removing it, then you are going from slightly more expensive to price parity, so we should expect that to be quite informative.

Additionally, a lot of the other factors are controlled for. For example, plant-based milk sales. Another quirk of these substitution studies is considering plant-based milks as a category overall.

Some studies find that different plant-based milks cannibalise each other's sales. But if we look at the category as a whole, do we see more evidence for substitution? More broadly, these kinds of elasticity models are not really built for cases where the challenger product is massively more expensive, much more expensive, two times more expensive than the incumbent.