IDEAS home Printed from https://ideas.repec.org/p/ags/iaae12/127103.html
   My bibliography  Save this paper

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

Author

Listed:
  • Richards, Timothy J.
  • Mancino, Lisa

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.

Suggested Citation

  • Richards, Timothy J. & Mancino, Lisa, 2012. "Demand for Food Away from Home: A Multiple Discrete/Continuous Extreme Value Model," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 127103, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae12:127103
    DOI: 10.22004/ag.econ.127103
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/127103/files/Richards_IAAE_2012_Brazil.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.127103?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jean Kinsey, 1983. "Working Wives and the Marginal Propensity to Consume Food Away from Home," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 65(1), pages 10-19.
    2. Timothy J. Richards & Luis Padilla, 2009. "Promotion and Fast Food Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 168-183.
    3. Brent R. Moulton, 1996. "Bias in the Consumer Price Index: What Is the Evidence?," Journal of Economic Perspectives, American Economic Association, vol. 10(4), pages 159-177, Fall.
    4. Goldman, Fred & Grossman, Michael, 1978. "The Demand for Pediatric Care: An Hedonic Approach," Journal of Political Economy, University of Chicago Press, vol. 86(2), pages 259-280, April.
    5. Bhat, Chandra R., 2005. "A multiple discrete-continuous extreme value model: formulation and application to discretionary time-use decisions," Transportation Research Part B: Methodological, Elsevier, vol. 39(8), pages 679-707, September.
    6. Wales, T. J. & Woodland, A. D., 1983. "Estimation of consumer demand systems with binding non-negativity constraints," Journal of Econometrics, Elsevier, vol. 21(3), pages 263-285, April.
    7. Phaneuf, Daniel J., 1999. "A Dual Approach to Modeling Corner Solutions in Recreation Demand," Journal of Environmental Economics and Management, Elsevier, vol. 37(1), pages 85-105, January.
    8. Leslie G. Godfrey, 1999. "Instrument Relevance in Multivariate Linear Models," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 550-552, August.
    9. Jaehong Park & George C. Davis, 2001. "The Theory and Econometrics of Health Information in Cross-Sectional Nutrient Demand Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(4), pages 840-851.
    10. Timothy J. Richards & Paul M. Patterson & Abebayehu Tegene, 2007. "Obesity And Nutrient Consumption: A Rational Addiction?," Contemporary Economic Policy, Western Economic Association International, vol. 25(3), pages 309-324, July.
    11. Igal Hendel, 1999. "Estimating Multiple-Discrete Choice Models: An Application to Computerization Returns," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 66(2), pages 423-446.
    12. Schroeter, Christiane & Lusk, Jayson & Tyner, Wallace, 2008. "Determining the impact of food price and income changes on body weight," Journal of Health Economics, Elsevier, vol. 27(1), pages 45-68, January.
    13. Vuong, Quang H, 1989. "Likelihood Ratio Tests for Model Selection and Non-nested Hypotheses," Econometrica, Econometric Society, vol. 57(2), pages 307-333, March.
    14. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74(2), pages 132-132.
    15. Arthur Lewbel, 1997. "Constructing Instruments for Regressions with Measurement Error when no Additional Data are Available, with an Application to Patents and R&D," Econometrica, Econometric Society, vol. 65(5), pages 1201-1214, September.
    16. Michael L. Anderson & David A. Matsa, 2011. "Are Restaurants Really Supersizing America?," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 152-188, January.
    17. Nakamura, Alice & Nakamura, Masao, 1998. "Model specification and endogeneity," Journal of Econometrics, Elsevier, vol. 83(1-2), pages 213-237.
    18. John Shea, 1997. "Instrument Relevance in Multivariate Linear Models: A Simple Measure," The Review of Economics and Statistics, MIT Press, vol. 79(2), pages 348-352, May.
    19. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    20. Mancino, Lisa & Todd, Jessica & Lin, Biing-Hwan, 2009. "Separating what we eat from where: Measuring the effect of food away from home on diet quality," Food Policy, Elsevier, vol. 34(6), pages 557-562, December.
    21. Chou, Shin-Yi & Grossman, Michael & Saffer, Henry, 2004. "An economic analysis of adult obesity: results from the Behavioral Risk Factor Surveillance System," Journal of Health Economics, Elsevier, vol. 23(3), pages 565-587, May.
    22. Amemiya, Takeshi, 1974. "Multivariate Regression and Simultaneous Equation Models when the Dependent Variables Are Truncated Normal," Econometrica, Econometric Society, vol. 42(6), pages 999-1012, November.
    23. Lee, Jonq-Ying & Brown, Mark G, 1986. "Food Expenditures at Home and Away from Home in the United States-A Switching Regression Analysis," The Review of Economics and Statistics, MIT Press, vol. 68(1), pages 142-147, February.
    24. Pinjari, Abdul Rawoof & Bhat, Chandra, 2010. "A multiple discrete-continuous nested extreme value (MDCNEV) model: Formulation and application to non-worker activity time-use and timing behavior on weekdays," Transportation Research Part B: Methodological, Elsevier, vol. 44(4), pages 562-583, May.
    25. K. K. Lancaster, 2010. "A New Approach to Consumer Theory," Levine's Working Paper Archive 1385, David K. Levine.
    26. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762.
    27. Bhat, Chandra R., 2008. "The multiple discrete-continuous extreme value (MDCEV) model: Role of utility function parameters, identification considerations, and model extensions," Transportation Research Part B: Methodological, Elsevier, vol. 42(3), pages 274-303, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Richards, Timothy J. & Gómez, Miguel I. & Pofahl, Geoffrey, 2012. "A Multiple-discrete/Continuous Model of Price Promotion," Journal of Retailing, Elsevier, vol. 88(2), pages 206-225.
    2. Richards Timothy J. & Mancino Lisa & Nganje William, 2012. "Nutrient Demand in Food Away from Home," Forum for Health Economics & Policy, De Gruyter, vol. 15(2), pages 1-31, April.
    3. Bonnet, Céline & Richards, Timothy J., 2016. "Models of Consumer Demand for Differentiated Products," TSE Working Papers 16-741, Toulouse School of Economics (TSE).
    4. Ljungvall, Åsa & Gerdtham, Ulf-G., 2010. "More equal but heavier: A longitudinal analysis of income-related obesity inequalities in an adult Swedish cohort," Social Science & Medicine, Elsevier, vol. 70(2), pages 221-231, January.
    5. Bhat, Chandra R., 2018. "A new flexible multiple discrete–continuous extreme value (MDCEV) choice model," Transportation Research Part B: Methodological, Elsevier, vol. 110(C), pages 261-279.
    6. Richards, Timothy J. & Mancino, Lisa, 2011. "Demand for Food-Away-From-Home: A Multiple Discrete/Continuous Extreme Value Model," 2012 AAEA/EAAE Food Environment Symposium 123390, Agricultural and Applied Economics Association.
    7. Bhat, Chandra R., 2008. "The multiple discrete-continuous extreme value (MDCEV) model: Role of utility function parameters, identification considerations, and model extensions," Transportation Research Part B: Methodological, Elsevier, vol. 42(3), pages 274-303, March.
    8. Bhat, Chandra R. & Mondal, Aupal & Asmussen, Katherine E. & Bhat, Aarti C., 2020. "A multiple discrete extreme value choice model with grouped consumption data and unobserved budgets," Transportation Research Part B: Methodological, Elsevier, vol. 141(C), pages 196-222.
    9. Jing Li & Edward C. Jaenicke & Tobenna D. Anekwe & Alessandro Bonanno, 2018. "Demand for ready‐to‐eat cereals with household‐level censored purchase data and nutrition label information: A distance metric approach," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 687-713, October.
    10. Pinjari, Abdul Rawoof & Augustin, Bertho & Sivaraman, Vijayaraghavan & Faghih Imani, Ahmadreza & Eluru, Naveen & Pendyala, Ram M., 2016. "Stochastic frontier estimation of budgets for Kuhn–Tucker demand systems: Application to activity time-use analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 88(C), pages 117-133.
    11. Bhat, Chandra R., 2022. "A new closed-form two-stage budgeting-based multiple discrete-continuous model," Transportation Research Part B: Methodological, Elsevier, vol. 164(C), pages 162-192.
    12. Sobhani, Anae & Eluru, Naveen & Faghih-Imani, Ahmadreza, 2013. "A latent segmentation based multiple discrete continuous extreme value model," Transportation Research Part B: Methodological, Elsevier, vol. 58(C), pages 154-169.
    13. Saxena, Shobhit & Pinjari, Abdul Rawoof & Paleti, Rajesh, 2022. "A multiple discrete-continuous extreme value model with ordered preferences (MDCEV-OP): Modelling framework for episode-level activity participation and time-use analysis," Transportation Research Part B: Methodological, Elsevier, vol. 166(C), pages 259-283.
    14. Pinjari, Abdul Rawoof & Bhat, Chandra, 2021. "Computationally efficient forecasting procedures for Kuhn-Tucker consumer demand model systems: Application to residential energy consumption analysis," Journal of choice modelling, Elsevier, vol. 39(C).
    15. Bhat, Chandra R. & Castro, Marisol & Pinjari, Abdul Rawoof, 2015. "Allowing for complementarity and rich substitution patterns in multiple discrete–continuous models," Transportation Research Part B: Methodological, Elsevier, vol. 81(P1), pages 59-77.
    16. Chandra Bhat & Abdul Pinjari, 2014. "Multiple discrete-continuous choice models: a reflective analysis and a prospective view," Chapters, in: Stephane Hess & Andrew Daly (ed.), Handbook of Choice Modelling, chapter 19, pages 427-454, Edward Elgar Publishing.
    17. Arthur Lewbel & Lars Nesheim, 2019. "Sparse demand systems: corners and complements," Boston College Working Papers in Economics 1005, Boston College Department of Economics.
    18. A. Montini, 1999. "I consumi alimentari delle famiglie italiane: un modello per le decisioni di consumo extradomestico utilizzando i microdati di spesa familiare," Working Papers 364, Dipartimento Scienze Economiche, Universita' di Bologna.
    19. Pinjari, Abdul Rawoof, 2011. "Generalized extreme value (GEV)-based error structures for multiple discrete-continuous choice models," Transportation Research Part B: Methodological, Elsevier, vol. 45(3), pages 474-489, March.
    20. Abdul Pinjari & Chandra Bhat & David S. Bunch, 2013. "Workshop report: recent advances on modeling multiple discrete-continuous choices," Chapters, in: Stephane Hess & Andrew Daly (ed.), Choice Modelling, chapter 3, pages 73-90, Edward Elgar Publishing.

    More about this item

    Keywords

    Consumer/Household Economics; Food Consumption/Nutrition/Food Safety; Marketing;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaae12:127103. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.