Household versus Community Effects: Who Really Pays More for Food?

One strand of literature shows a household's cost of food to vary with the household's own income and demographic characteristics. For example, low-income households may tend to purchase less costly bundles of food. However, a separate strand of literature also shows food prices to vary spatially with the characteristics of communities, such as real estate prices. In this study, a model is developed that unites these two strands. Simulations further illustrate the effect that a community's characteristics can have on a household's food budget, if the household lives in each of ten cities in the United States.Consumer/Household Economics,

How Low-Income Households Allocate Their Food Budget Relative to the Cost of the Thrifty Food Plan

By allocating their food budgets in accordance with USDA’s Thrifty Food Plan (TFP), which serves as a national standard for a low-cost nutritious diet, low-income U.S. households can meet recommended dietary guidelines. This study sought to determine whether selected types of low-income households allocate their food budgets in accordance with the TFP. In addition to expenditures for total food and food-at-home, the study looked at four large food-at-home categories: meats, cereals and bakery goods, fruits and vegetables, and dairy products. The analysis found that low-income households as a whole spent about 86 percent of the TFP costs for food at home. These households spent slightly over the TFP amount (102 percent) on cereals and bakery goods, but only 53 percent of the TFP costs on fruits and vegetables. Simulations for specific types of low-income households indicated that expenditures by female-headed households with children and married couples with children were least likely to equal the TFP expenditures.Thrifty Food Plan, low-income households, food consumption, food assistance programs, Consumer Expenditure Survey, Food Consumption/Nutrition/Food Safety,

Food Spending in American Households, 2003-04

Average yearly expenditures on food in U.S. urban households increased between 2003 and 2004. Over the period, annual per capita spending on food rose from $2,035 to$2,207. The 2004 average comprises $1,347 spent on food consumed at home and$860 spent on food consumed away from home. These amounts reflect a year-to-year increase of 7.9 percent in food-at-home expenditures and 9.3 percent in food-away-from-home expenditures. Wealthier urban households tended to spend more than other urban households for both food at home and food away from home, and they spent a larger share of their food budget than other households on food consumed away from home. The share of the food budget spent on food consumed away from home varied from 30 percent for the poorest group to 44 percent for the wealthiest.Food expenditures, BLS Consumer Expenditure Diary Survey, socioeconomic characteristics Acknowledgments, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis,

Are Lower Income Households Willing and Able To Budget for Fruits and Vegetables?

Households have a number of needs and wants that all compete for scarce resources. Given this situation, are low-income households, in particular, generally willing and able to budget for healthful foods like fruits and vegetables, or are other goods and services, including other foods, more of a priority? For six out of seven selected types of food, we find that households with an income below 130 percent of the poverty line spend less money than higher income households. However, we also find that these households, when given a small increase in income, will allocate more money to only two out of the seven products, beef and frozen prepared foods. These foods may be priorities for reasons of taste and convenience. For additional money to be allocated to fruits and vegetables, a household’s income needs to be slightly greater than 130 percent of the poverty line.food expenditures, fruits, vegetables, hierarchical demand, low-income households, food spending, Agricultural and Food Policy, Consumer/Household Economics, Financial Economics, Food Consumption/Nutrition/Food Safety,

Price Trends Are Similar for Fruits, Vegetables, and Snack Foods

An increase in the price of fruits and vegetables relative to less healthy foods could reduce consumers’ incentives to purchase fruits and vegetables and result in less healthy diets. Whether such a change in relative prices and incentives has occurred in the United States is difficult to prove because of substantial quality improvements in many fresh fruits and vegetables. For commonly consumed fresh fruits and vegetables for which quality has remained fairly constant, analysis of price trends reveals a price decline similar to that of dessert and snack foods. This price trend evidence suggests that the price of a healthy diet has not changed relative to an unhealthy one, although a healthy diet might not include every fresh fruit or vegetable currently available.fresh fruit and vegetable prices, price trends, quality change, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Financial Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy,

Household Food Purchase Patterns: The Case of Vegetables

A household’s purchase pattern for food can be described along three dimensions: how much food is bought, what types of food are bought, and how often food is bought. We have proposed a model in which these three facets of purchase behavior are simultaneously determined. Among other things, our model allows us to ask whether a household’s frequency of purchase influences how much food is bought on any shopping occasion. This was not possible with past studies. We find that, in fact, the more time has elapsed between purchases, the greater the quantity of product a household will buy on its next shopping occasion.Food Consumption/Nutrition/Food Safety,

Price Dispersion and Accessibility: A Case study of Fast Food

This study examines spatial variation in the price and accessibility of fast food across a major urban area. We use novel data on the price of a representative fast food meal and the location of fast food restaurants belonging to one of three major chains in the District of Columbia and its surrounding suburbs. These data are used to test a structural model of spatial competition. The results of this study are easily interpreted and compared with a past analysis. We find that spatial differences in costs and demand conditions drive variation in the number of firms operating in a market, which in turn affects prices.food prices, food accessibility, spatial competition, price dispersion, fast food

Retail Dairy Prices Fluctuate with the Farm Value of Milk

Farm milk prices tend to be volatile. Dairy farmers, industry pundits, and policymakers further tend to react to price volatility with alarm. One point of concern is the response of retail prices. This study investigates farm-to-retail price transmission in the 2000s for whole milk and cheddar cheese. Results show that price shocks at the farm gate are transmitted with delay and asymmetry to retail. Differences in the nature of price transmission for whole milk and cheddar cheese prices are also identified.asymmetric price transmission, cointegration, dairy prices, error correction models, Demand and Price Analysis, Livestock Production/Industries,

Retail Dairy Prices Fluctuate with the Farm Value of Milk

Farm milk prices in the United States fluctuated throughout the 2000-2009 decade. Dairy farmers, industry pundits, and policymakers all reacted with much alarm. One point of concern has been the response of retail prices to farm price volatility. This study investigates farm-to-retail price transmission for two major dairy products – whole milk and Cheddar cheese – in the 2000s. Results show that price shocks at the farm gate were transmitted asymmetrically to retail. However, in order to best identify the nature of the transmission process, it is important to fit alternative model specifications.dairy prices, error correction models, price transmission, Demand and Price Analysis,

LOW-INCOME HOUSEHOLDS' EXPENDITURES ON FRUITS AND VEGETABLES

This report analyzes fruit and vegetable expenditures by low-income households and higher income households, and compares the sensitivity of both groups' purchases to changes in income. On average, low-income households spent $3.59 per capita per week on fruits and vegetables in 2000 while higher income households spent$5.02-a statistically significant difference. In addition, a statistical demand model indicates that marginal increases in income received by low-income households are not spent on additional fruits and vegetables. In contrast, increases in income received by higher income households do increase their fruit and vegetable expenditures. One interpretation of this finding is that low-income households will allocate an additional dollar of income to other food or nonfood items deemed more essential to the household such as meats, clothing, or housing.Low-income, food expenditures, fruits and vegetables, stochastic dominance, Food Consumption/Nutrition/Food Safety,