Food Expenditure, Food Preparation Time and Household Economies of Scale
This paper is concerned with the effect of household size on the allocation of household money and time to food consumption. A broad literature has examined household economies of scale. Since food is a private good, it might be expected that larger households, which could economize on shared goods such as housing, would spend more per equivalent household member on food. However, recent studies have found the opposite result: for households with similar total expenditures, larger families spend less per capita on food. This paper examines household time inputs and shows that economies of scale in preparing food can explain this result. I introduce economies of scale into a household production model. The size of the household changes both the relative price of a unit of food and the time required to prepare it, affecting household demand for both inputs to food production. Larger households can achieve the same level of consumption at lower expenditure by substituting cheaper production time for more expensive ingredients. Using household expenditure and time-use survey data from Russia, I estimate the effect of changing household size on food expenditures and food-related time. The estimates indicate that doubling the size of household reduces per capita food expenditure by over 30% and per capita preparation time by about 75% in households with two and more people. A married man from a two adult household spends three times less time preparing food than a single man living alone. For a woman, a transition from a single to a two-person households results in more modest time saving of 45% in case such transition is not a result of a marriage. A married woman enjoys no time savings at all, while a woman with children spends more time in food-related activities than her single counterparts. I also find that the time intensity of meals increases with household size, but that the quality of meals is unaffected by changes in household size.
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- John Gibson, 2002.
"Why Does the Engel Method Work? Food Demand, Economies of Size and Household Survey Methods,"
Working Papers in Economics
02/02, University of Waikato, Department of Economics.
- Gibson, John, 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 341-59, September.
- Hamermesh, Daniel S. & Gronau, Reuben, 2007.
"The Demand for Variety: A Household Production Perspective,"
IZA Discussion Papers
2767, Institute for the Study of Labor (IZA).
- Reuben Gronau & Daniel S. Hamermesh, 2008. "The Demand for Variety: A Household Production Perspective," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 562-572, August.
- Reuben Gronau & Daniel S. Hamermesh, 2001. "The Demand for Variety: A Household Production Perspective," NBER Working Papers 8509, National Bureau of Economic Research, Inc.
- Jayanta Bhattacharya & Thomas DeLeire & Steven Haider & Janet Currie, 2002. "Heat or Eat? Cold Weather Shocks and Nutrition in Poor American Families," NBER Working Papers 9004, National Bureau of Economic Research, Inc.
- Mark Aguiar & Erik Hurst, 2004. "Consumption vs. Expenditure," NBER Working Papers 10307, National Bureau of Economic Research, Inc.
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