Bread Prices, Consumption and Nutrition Implications for Scotland: A Regional Analysis Using Supermarket Scanner Data

The recent rise in food prices has increased the concern about the choice of a healthy food basket, especially in the context of the discussion around the formulation of a National Food Policy for Scotland. This concern has brought back the interest in the price and expenditure demand systems as they provide information about consumers’ food decisions. The paper focuses on the consumption of brown and white bread, as they are the most typical ways of cereals use in the UK and nutritionists recommend the consumption of wholemeal or brown bread in contraposition to white bread as part of an appropriate diet due to its health benefits. This paper aims to answer whether changes in bread prices affect the quantity and composition of the Scottish demand for bread, and whether the latter has been the same for different regions and socioeconomic groups. We used supermarket scanner data to estimate three demand systems and compute their elasticities. All the models showed statistically significant own price and expenditure elasticities and the Hicksian elasticities show that different types of bread are net substitutes. After simulating an increase in all the bread prices we found that brown bread consumption decreases more than white bread just the opposite to what is recommended by the nutritionists.