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Exploring the Returns-to-Scale in Food Preparation

  • Thomas F. Crossley
  • Yuqian Lu

We show that as household size increases, households substitute away from prepared foods and towards ingredients. They also devote more time to food preparation. These observations (1) are consistent with a simple model with home production, returns to scale in the time input to food preparation, and varieties of food that differ in the required time input; (2) support the idea that returns to scale in home production are an important source of returns to scale in consumption; and (3), mean that across household sizes, household market expenditures on food are not proportional to food consumption quantities. The latter may provide a partial explanation for a puzzle raised by Deaton and Paxson.

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File URL: http://www.economics.mcmaster.ca/documents/department-working-papers/2004-06.pdf
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Paper provided by McMaster University in its series Department of Economics Working Papers with number 2004-06.

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Length: 27 pages
Date of creation: Jun 2004
Date of revision:
Handle: RePEc:mcm:deptwp:2004-06
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  1. Angus Deaton & Christina Paxson, 2003. "Engel's What? A Response to Gan and Vernon," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1378-1381, December.
  2. Martin Browning & Pierre-Andrée Chiappori & Arthur Lewbel, 2004. "Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power," Boston College Working Papers in Economics 588, Boston College Department of Economics, revised 01 Sep 2010.
  3. Apps, Patricia & Rees, Ray, 2001. "Household Saving and Full Consumption over the Life Cycle," IZA Discussion Papers 280, Institute for the Study of Labor (IZA).
  4. 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.
  5. Mark Aguiar & Erik Hurst, 2004. "Consumption vs. Expenditure," NBER Working Papers 10307, National Bureau of Economic Research, Inc.
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