|Detailed Objective: This study estimates the impacts on retail and farm prices of changes in income and other factors affecting consumer demand using a framework that accounts for the diversity both of products and of household budgets. In general, changes in total consumer expenditures (income), retail prices, and input prices each affect farm prices and retail-farm price margins, as well as affecting the statistical examination and tests for competitive food markets. It is likely that changes in the benefits paid to households under food assistance programs will affect the distribution of total expenditures. Thus, changes in the distribution of income induced by changes in food assistance will shift composite demand and affect retail-farm price relationships.
A goal of this study is to assess the magnitude of such affects. One aspect of the study is its estimation of composite demand variables that capture the diversity of the wide assortment of food products within a composite food category. Another notable feature is the study's construction of a representative total expenditure (income) variable that accounts for differences among the budgets of lower- and higher-income households.
Estimates generated by this study will be based on published secondary data on expenditures, prices, and farm receipts and on an economic market model that accounts for the diversity of food products, production technologies and household budgets.