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Household Food Expenditures Across Income Groups: Do Poor Households Spend Differently than Rich Ones?

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Author Info
Damon, Amy L.
King, Robert P.
Leibtag, Ephraim

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Abstract

The Life Cycle - Permanent Income Hypotheses (LCPIH) suggests that the timing of an income payment or government transfer should have no effect on the expenditures of the recipient. In this paper we test the LCPIH against a dynamic model of household consumption which predicts clustered food expenditure. We use data from 7,013 households in fifty-two urban and peri-urban markets throughout the United States containing detailed daily expenditure data collected by ACNielsen Homescan for 2003. Specifically, we examine aggregate food expenditure patterns, shopping trip patterns, and expenditure patterns across retail channels over calendar weeks, weekly seven day cycles, and days of the week. Our main finding is that households in the lowest 25 percent of the income distribution that have zero employed people have a significantly higher differenced expenditure level in the beginning of the month and significantly lower differenced expenditure in the last week or weeks of the calendar month, thus rejecting the LCPIH. Further, we find that, in general, households do not use convenience stores as a complementary retail channel to the grocery channel.

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Publisher Info
Paper provided by University of Minnesota, Center for International Food and Agricultural Policy in its series Conference Papers with number 6643.

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Date of creation: Aug 2006
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Handle: RePEc:ags:umcicp:6643

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Related research
Keywords: Food Consumption/Nutrition/Food Safety;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Melvin Stephens Jr., 2002. "Paycheck Receipt and the Timing of Consumption," NBER Working Papers 9356, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Tullio Jappelli & Jörn-Steffen Pischke & Nicholas S. Souleles, 1998. "Testing For Liquidity Constraints In Euler Equations With Complementary Data Sources," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 251-262, May. [Downloadable!] (restricted)
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  3. Huffman, David & Barenstein, Matias, 2004. "Riches to Rags Every Month? The Fall in Consumption Expenditures Between Paydays," IZA Discussion Papers 1430, Institute for the Study of Labor (IZA). [Downloadable!]
  4. repec:fth:pennfi:69 is not listed on IDEAS
  5. Shapiro, Jesse M., 2005. "Is there a daily discount rate? Evidence from the food stamp nutrition cycle," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 303-325, February. [Downloadable!] (restricted)
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  6. Wilde, Parke E & Ranney, Christine K, 2000. " The Monthly Food Stamp Cycle: Shopping Frequency and Food Intake Decisions in an Endogenous Switching Regression Framework," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 82(1), pages 200-213, February. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Wendt, Minh & Kinsey, Jean & Kaufman, Phillip, 2008. "Food Accessibility in the Inner City: What Have We Learned, A Literature Review 1963-2006," Working Papers 37625, University of Minnesota, The Food Industry Center. [Downloadable!]
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