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Households' Choices Among Fluid Milk Products: What Happens When Income and Prices Change?

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  • Dong, Diansheng
  • Stewart, Hayden

Abstract

Households have several ways to economize on their purchases at retail food stores when prices increase or their incomes fall. This report investigates a household’s choice among retail fluid milk products categorized along three dimensions: three levels of fat content, two levels of package size, and organic versus conventional methods of production. Nielsen Homescan data from 2007-08 are used to estimate a choice model, which accounts for price, income, and other choice determinants. Results show that small changes in prices and income have a modest impact on a household’s choice among milk products. However, households mitigate the impact of more substantial price and income shocks by switching from more expensive to less expensive products. We also find that the demand for organic milk is more sensitive to swings in income and food prices than is demand for conventional milk.

Suggested Citation

  • Dong, Diansheng & Stewart, Hayden, 2013. "Households' Choices Among Fluid Milk Products: What Happens When Income and Prices Change?," Economic Research Report 262226, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersrr:262226
    DOI: 10.22004/ag.econ.262226
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    References listed on IDEAS

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    1. Kiesel Kristin & Villas-Boas Sofia B, 2007. "Got Organic Milk? Consumer Valuations of Milk Labels after the Implementation of the USDA Organic Seal," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(1), pages 1-40, April.
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    Cited by:

    1. Su, Ye & Cook, Michael L., 2014. "Price Sustainability and Stability – An Achievable Goal? A Case Study of Organic Valley," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 174399, Agricultural and Applied Economics Association.

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