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Demand for Food Away from Home: A Multiple Discrete/Continuous Extreme Value Model

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  • Richards, Timothy J.
  • Mancino, Lisa
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    Abstract

    Policymakers have suggested the use of taxes to raise the relative cost of buying fast food. Yet, little is known of the structure of demand for food-away-from-home (FAFH) in general. This study provides estimates of the price-elasticity of demand for four different types of FAFH using a new dataset from NPD, Inc. and an econometric approach that accounts for the multiple discrete / continuous nature of FAFH demand. We find that cross-price elasticities of demand are small, so consumers are unwilling to substitute between FAH and any type of FAFH or among types of FAFH. Therefore, taxing fast food may be effective in reducing the number of fast food visits and shifting consumption to at-home meals.

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    File URL: http://purl.umn.edu/127103
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    Bibliographic Info

    Paper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 127103.

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    Date of creation: 2012
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    Handle: RePEc:ags:iaae12:127103

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    Web page: http://www.iaae-agecon.org/
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    Keywords: food away from home; demand; obesity; continuous / discrete models; Consumer/Household Economics; Food Consumption/Nutrition/Food Safety; Marketing;

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