A Censored Demand System Analysis of Fruits and Vegetables by Different Income Groups Using Micro Data

This study examines demand for fruits and vegetables segmented by income levels in a complete demand system framework using the Consumer Expenditure Survey (CEX) from 2002 to 2006. Results show that disparities are found between high-income households and low-income households. Seasonal effects and demographic variables, such as household heads’ race and gender, region, household size and household composition, play an important role in fruit and vegetable consumption for both categories of household. In contrast, urban status, household heads’ educational level and age are not found to have a statistically significant impact for low-income households. Conditional price elasticities indicate that processed fruits and vegetables, fresh fruits and fresh vegetables are “gross complements” and “net substitutes”. Moreover, compared to high-income households, the low-income households are more responsive to own price changes for all three categories; these households are also more responsive to expenditure changes for processed fruits and vegetables.

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Selected Paper 76

 Record created 2017-04-01, last modified 2018-01-22

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