Analysis of Food‐Away‐from‐Home Expenditure Patterns for U.S. Households, 1982–89

Abstract

The two-step decision process for food-away-from-home (FAFH) consumption is empirically estimated using a generalization of the Heien and Wessells approach. Household information gathered by the National Panel Diary Group is used for the analysis. Marginal effects are corrected by untangling the respective variable impacts on the inverse Mills ratio. Expenditure and participation probability elasticities are similar to previous studies. Income elasticities ate about 0.20, suggesting that the FAFH commodity is a necessary good for U.S. society. Northeastern households are less likely to consume FAFH than other households, but their expenditures are higher on average.Key words: censored response modeling, food away from home.Socioeconomic and demographic trends are frequently cited as potential influences on food-away-from-home (FAFH) consumption (Prochaska and Schrimper; McCracken and Brandt; Lee and Brown; Yen; Kinsey; Nayga and Capps). Increased participation of women in the labor force places new constraints on household production time. As such, the convenience of FAFH is an attractive attribute to these households as well as to single-adult households. Factors such as age, ethnicity, regionality, urbanization, and education have potential effects on FAFH consumption due to differences in preferences, availability, and price. Successful marketing in the consumer-driven food industry requires an understanding for the role of demographic factors and recent trends of U.S. households on FAFH consumption.Previous studies have offered estimates of income and household size elasticities (Lamm; McCracken and Brandt; Yen). A summary of

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“…Finally, to avoid the sample selection problem, defined as an omitted variable problem (Heckman, 1976), we have used the estimator proposed by Heien and Wessells in the early 1990s (Heien and Wessells, 1990; see, for some application, Byrne et al, 1996;Manrique and Jensen, 1997) that allows using all of the observations in each stage, whereas the traditional Heckman two-step estimator omits zero observations for the second stage. This estimator is called inverse Mills Ratio (MR) and is calculated on the basis of the estimations obtained through the Probit model (selection stage).…”

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“…FAFH consumption decision is also given a great deal of attention in literature from a variety of aspects and a number of potential determinants such as age, education, sex, income, wealth, household size, race and urbanization have been suggested (Byrne et al, 1996;Jensen and Yen, 1996;Mutlu and Gracia, 2006;Angulo et al, 2007;Bai et al, 2010). At a country level there have also been several studies focusing on the consumption on FAFH in Turkey (Bozoğlu et al, 2013;Uzunoz et al, 2011;Akbay and Boz, 2005).…”