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Exploring the returns to scale in food preparation (baking penny buns at home)

Author

Listed:
  • Thomas Crossley

    (Institute for Fiscal Studies and University of Essex and European University Institute)

  • Yuqian Lu

    (Institute for Fiscal Studies)

Abstract

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.

Suggested Citation

  • Thomas Crossley & Yuqian Lu, 2005. "Exploring the returns to scale in food preparation (baking penny buns at home)," IFS Working Papers W05/03, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:05/03
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    File URL: http://www.ifs.org.uk/wps/wp0503.pdf
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    References listed on IDEAS

    as
    1. Martin Browning & Pierre-André Chiappori & Arthur Lewbel, 2013. "Estimating Consumption Economies of Scale, Adult Equivalence Scales, and Household Bargaining Power," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(4), pages 1267-1303.
    2. Patricia Apps & Ray Rees, 2001. "Household Saving and Full Consumpyion Over the Life Cycle," CEPR Discussion Papers 428, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    3. 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.
    4. Mark Aguiar & Erik Hurst, 2004. "Consumption vs. Expenditure," NBER Working Papers 10307, National Bureau of Economic Research, Inc.
    5. 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.
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    Cited by:

    1. Beatty, Timothy K.M. & Tuttle, Charlotte, 2014. "The Effect of Energy Price Shocks on Household Food Security: Do Federal Assistance Programs Mitigate the Effects of Price Shocks," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170546, Agricultural and Applied Economics Association.
    2. Cristina Borra & Martin Browning & Almudena Sevilla, 2021. "Marriage and housework," Oxford Economic Papers, Oxford University Press, vol. 73(2), pages 479-508.
    3. Thomas F. Crossley & Yuqian Lu, 2018. "Returns to scale in food preparation and the Deaton–Paxson puzzle," Review of Economics of the Household, Springer, vol. 16(1), pages 5-19, March.
    4. Beatty, Timothy K.M. & Tuttle, Charlotte, 2012. "The Effect of Energy Price Shocks on Household Food Security," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124791, Agricultural and Applied Economics Association.
    5. Richard Dunn, 2015. "Labor supply and household meal production among working adults in the Health and Retirement Survey," Review of Economics of the Household, Springer, vol. 13(2), pages 437-457, June.
    6. Jesper R.-V. Soerensen, 2020. "Testing a Class of Semi- or Nonparametric Conditional Moment Restriction Models using Series Methods," Discussion Papers 20-04, University of Copenhagen. Department of Economics.
    7. Berendeeva, Ekaterina & Ratnikova, Tatiana, 2016. "The Deaton–Paxson paradox in the consumption of Russian households," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 42, pages 54-74.
    8. Brencic, Vera & Young, Denise, 2009. "Time-saving innovations, time allocation, and energy use: Evidence from Canadian households," Ecological Economics, Elsevier, vol. 68(11), pages 2859-2867, September.

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    More about this item

    Keywords

    Household returns to scale; home production; food preparation;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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