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Abstract
The relative recent rise in food prices has increased concern about the choice of a
healthy food basket, especially in the context of the formulation of a National Food
Policy for Scotland. This concern has revived interest in food 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 forms of cereals use in the UK. Moreover, 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. The overall purpose of the paper is to
measure the impact that the increase in the price of cereals during the period 2005 to
2008 would have had on the purchase of brown and white bread. This is undertaken
in two stages: the first measures the effect of changes in milling wheat prices on
brown and white bread prices, and the second measures the elasticities of the
purchases of brown and white bread with respect to changes in their prices through
the estimation of two conditional demand systems for bread.