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Family Size and Food Consumption: Exploring Economies of Scale with Panel Data

Author

Listed:
  • José M. Casado

    (Bank of Spain)

  • José Ignacio Giménez-Nadal

    (University of Zaragoza and IEDIS)

  • José M. Labeaga

    (UNED)

  • José Alberto Molina

    (University of Zaragoza and IEDIS)

Abstract

We analyze the effects of family size on food consumption. Specifically, we explore the economies of scale that emerge in families, taking advantage of a very rich panel data for Spanish consumers. We hypothesize that family public goods induce economies of scale in consumption and, consequently, larger families should have higher per capita consumption of private goods, such as food. To that end, we estimate the Quadratic Almost Ideal Demand System to derive own-price and income elasticities, which allows us to test the economies of scale conditions on food consumption. Our results show that the positive relationship between per capita food expenditure and family size holds in only 585 observations, with these families being characterized as having per capita income in the two highest centiles of the distribution. Our results should be interpreted in the context of the particular economic crises of the 1970s and 1980s, as a consequence of the economic shocks due to very high oil prices that affected Spain.

Suggested Citation

  • José M. Casado & José Ignacio Giménez-Nadal & José M. Labeaga & José Alberto Molina, 2025. "Family Size and Food Consumption: Exploring Economies of Scale with Panel Data," Journal of Family and Economic Issues, Springer, vol. 46(2), pages 373-382, June.
    • Handle: RePEc:kap:jfamec:v:46:y:2025:i:2:d:10.1007_s10834-024-09971-x
    DOI: 10.1007/s10834-024-09971-x
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    References listed on IDEAS

    as
    1. Angus Deaton & Christina Paxson, 1998. "Economies of Scale, Household Size, and the Demand for Food," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 897-930, October.
    2. John Gibson & Bonggeun Kim, 2018. "Economies of scale, bulk discounts, and liquidity constraints: comparing unit value and transaction level evidence in a poor country," Review of Economics of the Household, Springer, vol. 16(1), pages 21-39, March.
    3. Awudu Abdulai, 2003. "Economies of Scale and the Demand for Food in Switzerland: Parametric and Non‐Parametric Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 54(2), pages 247-267, July.
    4. Rachel Griffith & Ephraim Leibtag & Andrew Leicester & Aviv Nevo, 2009. "Consumer Shopping Behavior: How Much Do Consumers Save?," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 99-120, Spring.
    5. Thomas F. Crossley & Yuqian Lu, 2018. "Returns to scale in food preparation and the Deaton–Paxson puzzle," Review of Economics of the Household, Springer, vol. 16(1), pages 5-19, March.
    6. John Gibson, 2002. "Why Does the Engel Method Work? Food Demand, Economies of Size and Household Survey Methods," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(4), pages 341-359, September.
    7. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
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    9. John Gibson & Bonggeun Kim, 2007. "Measurement Error in Recall Surveys and the Relationship between Household Size and Food Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 473-489.
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    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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