IDEAS home Printed from https://ideas.repec.org/p/ags/uersrr/262226.html
   My bibliography  Save this paper

Households' Choices Among Fluid Milk Products: What Happens When Income and Prices Change?

Author

Listed:
  • Dong, Diansheng
  • Stewart, Hayden

Abstract

Households have several ways to economize on their purchases at retail food stores when prices increase or their incomes fall. This report investigates a household’s choice among retail fluid milk products categorized along three dimensions: three levels of fat content, two levels of package size, and organic versus conventional methods of production. Nielsen Homescan data from 2007-08 are used to estimate a choice model, which accounts for price, income, and other choice determinants. Results show that small changes in prices and income have a modest impact on a household’s choice among milk products. However, households mitigate the impact of more substantial price and income shocks by switching from more expensive to less expensive products. We also find that the demand for organic milk is more sensitive to swings in income and food prices than is demand for conventional milk.

Suggested Citation

  • Dong, Diansheng & Stewart, Hayden, 2013. "Households' Choices Among Fluid Milk Products: What Happens When Income and Prices Change?," Economic Research Report 262226, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uersrr:262226
    DOI: 10.22004/ag.econ.262226
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/262226/files/36802_err146.pdf
    Download Restriction: no
    File URL: https://ageconsearch.umn.edu/record/262226/files/36802_err146.pdf?subformat=pdfa
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.262226?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Villas-Boas, Sofia B & Kiesel, Kristin, 2007. "Got Organic Milk? Consumer Valuations of Milk Labels after the Implementation o f the USDA Organic Seal," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt5593m46q, Department of Agricultural & Resource Economics, UC Berkeley.
    2. Davis, Christopher G. & Dong, Diansheng & Blayney, Donald P. & Owens, Ashley, 2010. "An Analysis of U.S. Household Dairy Demand," Technical Bulletins 184308, United States Department of Agriculture, Economic Research Service.
    3. Stewart, Hayden & Don, P. Blayney, 2011. "Retail Dairy Prices Fluctuate with the Farm Value of Milk," Agricultural and Resource Economics Review, Cambridge University Press, vol. 40(2), pages 201-217, September.
    4. Hausman, Jerry & McFadden, Daniel, 1984. "Specification Tests for the Multinomial Logit Model," Econometrica, Econometric Society, vol. 52(5), pages 1219-1240, September.
    5. Leibtag, Ephraim S. & Kaufman, Phillip R., 2003. "Exploring Food Purchase Behavior of Low-Income Households: How Do They Economize?," Agricultural Information Bulletins 33711, United States Department of Agriculture, Economic Research Service.
    6. Kiesel, Kristin & Villas-Boas, Sofia B, 2007. "Got Organic Milk? Consumer Valuations of Milk Labels after the Implementation of the USDA Organic Seal," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt9sx3j5hv, Department of Agricultural & Resource Economics, UC Berkeley.
    7. Kiesel Kristin & Villas-Boas Sofia B, 2007. "Got Organic Milk? Consumer Valuations of Milk Labels after the Implementation of the USDA Organic Seal," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(1), pages 1-40, April.
    8. Pedro A. Alviola & Oral Capps, 2010. "Household demand analysis of organic and conventional fluid milk in the United States based on the 2004 Nielsen Homescan panel," Agribusiness, John Wiley & Sons, Ltd., vol. 26(3), pages 369-388.
    9. Jorge Cornick & Thomas L. Cox & Brian W. Gould, 1994. "Fluid Milk Purchases: A Multivariate Tobit Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(1), pages 74-82.
    10. Jean-Pierre Dubé, 2004. "Multiple Discreteness and Product Differentiation: Demand for Carbonated Soft Drinks," Marketing Science, INFORMS, vol. 23(1), pages 66-81, September.
    11. Einav, Liran & Leibtag, Ephraim S. & Nevo, Aviv, 2008. "On the Accuracy of Nielsen Homescan Data," Economic Research Report 56490, United States Department of Agriculture, Economic Research Service.
    12. Kumcu, Aylin & Kaufman, Phillip R., 2011. "Food Spending Adjustments During Recessionary Times," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-8.
    13. Kiesel Kristin & Villas-Boas Sofia B, 2007. "Got Organic Milk? Consumer Valuations of Milk Labels after the Implementation of the USDA Organic Seal," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(1), pages 1-40, April.
    14. Tirtha Dhar & Jeremy D. Foltz, 2005. "Milk by Any Other Name … Consumer Benefits from Labeled Milk," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(1), pages 214-228.
    15. Andreyeva, T. & Long, M.W. & Brownell, K.D., 2010. "The impact of food prices on consumption: A systematic review of research on the price elasticity of demand for food," American Journal of Public Health, American Public Health Association, vol. 100(2), pages 216-222.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Su, Ye & Cook, Michael L., 2014. "Price Sustainability and Stability – An Achievable Goal? A Case Study of Organic Valley," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 174399, Agricultural and Applied Economics Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Céline Bonnet & Zohra Bouamra-Mechemache, 2016. "Organic Label, Bargaining Power, and Profit-sharing in the French Fluid Milk Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(1), pages 113-133.
    2. repec:ags:jrapmc:122316 is not listed on IDEAS
    3. Jay Corrigan & Matthew Rousu, 2008. "Estimating the value consumers derive from product labeling," Framed Field Experiments 00192, The Field Experiments Website.
    4. Lee, Yinjin & Bateman, Alexis, 2021. "The competitiveness of fair trade and organic versus conventional coffee based on consumer panel data," Ecological Economics, Elsevier, vol. 184(C).
    5. Philip Garland Gayle & Jin Wang & Shengnan Fang, 2023. "The Organic food price premium and its susceptibility to news media coverage: evidence from the US milk industry," Applied Economics, Taylor & Francis Journals, vol. 55(28), pages 3296-3315, June.
    6. Bougherara Douadia & Ropars-Collet Carole & Saint-Gilles Jude, 2022. "Impact of Private Labels and Information Campaigns on Organic and Fair Trade Food Demand," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 20(1), pages 39-59, May.
    7. repec:ken:wpaper:0802 is not listed on IDEAS
    8. Maximilian Koppenberg, 2023. "Markups, organic agriculture and downstream concentration at the example of European dairy farmers," Agricultural Economics, International Association of Agricultural Economists, vol. 54(2), pages 161-178, March.
    9. Rousu Matthew C. & Corrigan Jay R., 2008. "Estimating the Welfare Loss to Consumers When Food Labels Do Not Adequately Inform: An Application to Fair Trade Certification," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 6(1), pages 1-26, May.
    10. Syed Badruddoza & Andrea C. Carlson & Jill J. McCluskey, 2022. "Long‐term dynamics of US organic milk, eggs, and yogurt premiums," Agribusiness, John Wiley & Sons, Ltd., vol. 38(1), pages 45-72, January.
    11. Richard Friberg & Mark Sanctuary, 2018. "Market stealing and market expansion: an examination of product introductions in the organic coffee market," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 20(2), pages 287-303, April.
    12. Hallstein, Eric & Villas-Boas, Sofia Berto, 2009. "Are Consumers Color Blind?: an empirical investigation of a traffic light advisory for sustainable seafood," CUDARE Working Papers 120535, University of California, Berkeley, Department of Agricultural and Resource Economics.
    13. Matthias Staudigel & Aleksej Trubnikov, 2022. "High price premiums as barriers to organic meat demand? A hedonic analysis considering species, cut and retail outlet," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(2), pages 309-334, April.
    14. Bonnet, Céline & Hilger, James & Villas-Boas, Sofia B., 2017. "Reduced Form Evidence on Belief Updating under Asymmetric Information - The Case of Wine Expert Opinions," TSE Working Papers 17-834, Toulouse School of Economics (TSE), revised May 2019.
    15. Villas-Boas, Sofia B & Taylor, Rebecca & Krovetz, Hannah, 2016. "Willingness to Pay for Low Water Footprint Food Choices During Drought," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt9vh3x180, Department of Agricultural & Resource Economics, UC Berkeley.
    16. Kiesel, Kristin, 2012. "“A Definition at Last, But What Does it All Mean?” Newspaper Coverage of Organic Food Production and its Effects on Milk Purchases," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 37(1), pages 1-24, April.
    17. Villas-Boas, Sofia B & Copfer, Jackie & Campbell, Nica, 2021. "Preferences for Sustainability and Supply Chain Essential Worker Conditions: Survey Evidence during COVID-19," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt0nv2n39w, Department of Agricultural & Resource Economics, UC Berkeley.
    18. Elofsson, Katarina & Bengtsson, Niklas & Matsdotter, Elina & Arntyr, Johan, 2016. "The impact of climate information on milk demand: Evidence from a field experiment," Food Policy, Elsevier, vol. 58(C), pages 14-23.
    19. Carlson, Andrea & Greene, Catherine & Raszap Skorbiansky, Sharon & Hitaj, Claudia & Ha, Kim & Cavigelli, Michel & Ferrier, Peyton & McBride, William, 2023. "U.S. Organic Production, Markets, Consumers, and Policy, 2000-21," USDA Miscellaneous 333551, United States Department of Agriculture.
    20. Qizhong Yang & Keiichiro Honda & Tsunehiro Otsuki, 2019. "Structural demand estimation of the response to food safety regulations in the Japanese poultry market," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(3), pages 367-385, September.
    21. Edward C. Jaenicke & Andrea C. Carlson, 2015. "Estimating and Investigating Organic Premiums for Retail‐Level Food Products," Agribusiness, John Wiley & Sons, Ltd., vol. 31(4), pages 453-471, October.
    22. Lupin, Beatriz & Rodriguez, Elsa M., 2012. "Quality attributes and socio-demographic factors affecting channel choices," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126372, International Association of Agricultural Economists.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:uersrr:262226. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ersgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.