Project: Measuring Consumption Response to Prices in a Dynamic Model of Consumer Food Purchase Behavior
Award Year: 2007
Amount of award, fiscal 2007: $249,494.00
Institution: Research Triangle Institute
Principal Investigator: Chen Zhen
Status: Completed
Detailed Objective: Recent research suggests that the high incidence of obesity found in the low-income population may be due to overconsumption of foods that are energy dense but low in cost. Some hypothesize that the implicit price discount associated with larger package sizes contributes to over consumption of energy-dense foods. This study will analyze the economic determinants of food purchasing and consumption behavior of low-income households, using data from the ACNielsen Homescan panel survey of food purchases and a supplemental survey of Homescan households. Two food groups will be the focus of study-caloric soft drinks and salty snacks. Using an inventory model, shortrun and longrun responses to food prices will be estimated. The study will also examine several key issues regarding the implications of package sizes on overconsumption: 1) The effects of package size on the overconsumption of unhealthy foods in the short run. 2) The longrun effects of package size on the overconsumption of unhealthy foods due to habit formation. 3) Households' perceptions of the effects of package size on their consumption behavior.
Topic: Food Prices and Demand
Dataset: AC Nielsen Data
Zhen, C., M. Wohlgenant, S. Karns, and P. Kaufman. "Habit Formation and the Demand for Sugar-Sweetened Beverages," American Journal of Agricultural Economics, Vol. 93, Issue 1, January 2011.