Determinants of Food Expenditure Patterns: Evidence from U.S. Consumers in the Context of the COVID-19 Price Shocks

Clement O. Codjia, Sayed H. Saghaian

Research output: Contribution to journalArticlepeer-review

Abstract

This study examined the factors that determine U.S. household expenditure patterns for food products in the context of exceptional price shocks due to the COVID-19 pandemic. This research relied on the Consumer Expenditure Diary Survey (CEX) for the year 2020, where households or consumer units represent units of observation. With a sample size of 10,453 observations, the empirical estimation of the Heckman two-step model yields interesting results. Consistent with the inelastic nature of food products, we found conditional expenditure elasticities of income were less than one for all kinds of food, including food away from home (FAFH). The results showed both food and FAFH to be highly price elastic in this special period of higher food prices. For instance, a 1% increase in own price implied a 7.78% decrease in the probability to spend on food and a 20.93% decrease in propensity to purchase FAFH. This study provides business managers and marketing experts with insights on the consumer profile and food product price strategy.

Original languageEnglish
Article number8156
JournalSustainability (Switzerland)
Volume14
Issue number13
DOIs
StatePublished - Jul 1 2022

Bibliographical note

Funding Information:
Acknowledgments: The authors thank the reviewers and editors for their hardwork. Sayed H. Saghaian acknowledges the support from the United States Department of Agriculture, National Institute of Food and Agriculture, Hatch project No. KY004052, under accession number 1012994.

Publisher Copyright:
© 2022 by the authors. Licensee MDPI, Basel, Switzerland.

Keywords

  • food
  • food away from home
  • Heckman two-step model
  • U.S. households

ASJC Scopus subject areas

  • Computer Science (miscellaneous)
  • Geography, Planning and Development
  • Renewable Energy, Sustainability and the Environment
  • Building and Construction
  • Environmental Science (miscellaneous)
  • Energy Engineering and Power Technology
  • Hardware and Architecture
  • Computer Networks and Communications
  • Management, Monitoring, Policy and Law

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