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Forum for Health Economics & Policy

Editor-in-Chief: Goldman, Dana

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Nutrient Demand in Food Away from Home

Timothy J. Richards1 / Lisa Mancino2 / William Nganje3

1Arizona State University at the Te mpe Campus

2Economic Research Service, USDA

3Arizona State University

Citation Information: Forum for Health Economics & Policy. Volume 15, Issue 2, ISSN (Online) 1558-9544, DOI: 10.1515/1558-9544.1246, April 2012

Publication History

Published Online:
2012-04-02

Food away from home (FAFH) and, specifically fast food, has been targeted by academics and public policy officials alike as a major contributor to the obesity epidemic. Criticized as high in energy, fat and sugars, the implication is that consumers demand the combination of nutrients in FAFH in excess. If market-based policies intended to correct the perceived market failure in nutrient demand are to be successful, information on nutrient elasticities is required. Moreover, co-dependent relationships between nutrient intake and bioeconomic outcomes – obesity, physical activity and health status – are found to be important in the public health literature, but are not typically included in econometric studies of FAFH demand. Nutrients, however, do not have market prices. This study derives a set of implicit nutrient prices and estimates the elasticities of demand for nutrients in FAFH that takes into account the endogeneity of bioeconomic outcomes. Our estimation results show that fat is the only macro-nutrient that is elastic in demand, and all cross-price elasticities are small, so nutrient-based price policies may indeed be effective in modifying FAFH choices. Simulation results confirm this hypothesis, and also support the use of policies that subsidize positive health outcomes.

Keywords: food away from home; logit model; nutrient demand; taxation; food policy

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