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Impact of Food Price Inflation on Consumer Welfare Using Aggregated Time-Series Data

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  • Nam, Hosung
  • Jo, Jungkeon

Abstract

Understanding the drivers of consumer welfare changes in food consumption has important policy implications. This study measures changes in consumer surplus (CS) for food consumed at home and food services in the United States using aggregated Personal Consumption Expenditure (PCE) data. We apply a recently developed approach to disentangle food price movements into demand- and supply-side components, identifying which side of the market historically drives changes in CS. We find that CS generally declines during economic recessions. However, at the onset of the COVID-19 pandemic, CS for food consumed at home rose sharply—largely driven by positive demand shocks—while CS for food services fell substantially due to negative shocks from both supply and demand. During the recent period of food price inflation, CS for both food-at-home and food services increased, primarily driven by demand-side contributions.

Suggested Citation

  • Nam, Hosung & Jo, Jungkeon, 2025. "Impact of Food Price Inflation on Consumer Welfare Using Aggregated Time-Series Data," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 360842, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea25:360842
    DOI: 10.22004/ag.econ.360842
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    References listed on IDEAS

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    1. Liviu Voinea & Prakash Loungani, 2022. "Excess Savings Are Recession-Specific and Compensatory: Evidence From the US," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 57(4), pages 233-237, July.
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