Files
Abstract
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.