Purchases for Family: Heterogeneity of Demand Responses to Changes in Price and Expenditure

This study examines the elasticity of beverage demand from theoretical and empirical perspectives, focusing on who to buy for. The results of the theoretical analysis indicate that the more altruistic the purchaser, the more elastic the demand for self and the more inelastic the demand for family. We also estimated the EASI demand system using unique purchase history data for Japanese consumers, which records the purchase intention of each food item. The results suggest that when prices and expenditures change, some people reduce their own purchases and increase or keep constant purchases for their families. This indicates that policies based on the elasticity of the purchaser's demand may have a negligible effect on the purchaser's family or the opposite effect. It is also found that the expenditure elasticity of demand for the whole family is smaller for those living with children and more significant for those living with the elderly. Furthermore, the results reveal that both demand for self and sharing are more elastic to changes in expenditures for male purchasers than for female purchasers. These results suggest that the desired policy focusing on dietary improvement depends on who in the household is targeted.