Market effects of new product introduction: Evidence from the brew‐at‐home coffee market

The introduction of new products has always been an important source economic development and improvement in consumer welfare. With retail coffee data spanning 5 years after the single-cup brew pods were introduced to grocery chains, this paper empirically studies market effects product brew-at-home market. We use a structural model demand supply capture changes consumers’ preference for over time. estimates suggest that relative willingness-to-pay grew substantially sample periods. analysis reveals extent which growing presence simultaneously expanded relevant cannibalized sales pre-existing substitute (traditional auto-drip products). Furthermore, we quantify annually expanding welfare gains average attributable product.