Estimating Food and Drink Elasticities
In June 2019 the UK government began the process of establishing a National Food Strategy for the first time in 75 years, reflecting the rise in the importance of the environmental, health and social impacts of food consumption.
Summary & aims
The National Food Strategy will require robust evidence on how the consumption of different foods is likely to change in a rapidly evolving policy environment, and this requires a model of consumer demand, as does policy interventions such as the ‘sugar tax’ on sweetened drinks. The project is funded by the Department for Environment, Food and Rural Affairs (Defra) and the analysis will provide updated and detailed evidence on how UK consumers’ food and drink purchases respond to food price and expenditure changes.
Methodology
Our approach will build on previous studies, but offers a number of methodological improvements. We intend to build on the established workhorse, the Almost Ideal Demand System (AIDS). The AIDS model is derived from a formal model of consumer behaviour, satisfying the axioms of choice in standard consumer theory, and it has a functional form that is consistent with known household-budget data. One extension of the simple AIDS approach is to model discrete-continuous choices to capture discrete category choice followed by continuous choice of purchase quantities within each category.
This project began in September 2021 and is due to be completed in Spring 2022.
Findings and Recommendations
Co-Investigator
Related Blog Posts
Child Language Brokering: What It Is and How It Is Experienced By Migrant Families
29 Jan 2024
7 min read
What are the Experiences of Latin American Migrants Accessing Healthcare?
16 Oct 2023
5 min read
Related Projects
Related News
1.2 million UK Households Insolvent This Year as a Direct Result of Higher Mortgage Repayments
22 Jun 2023
2 min read
Thousands Of Households Projected To Face Monthly Mortgage Repayments Greater Than Their Monthly Incomes
03 Nov 2022
2 min read
Related Publications
The Nature of the Inflationary Surprise in Europe and the USA
21 Mar 2024
Discussion Papers
Supporting Immigration Advice Amidst Financial Challenges: Local Authorities’ Funding Initiatives
29 Feb 2024
Topical Briefing
Implications of the Transition from Defined Benefit to Defined Contribution Pensions in the UK
07 Feb 2024
UK Economic Outlook Box Analysis
Exploring Alternative Data Sources for Household Wealth Statistics
24 Jan 2024
Discussion Papers
Related events
Taxing Consumption
2021 Anglo German Foundation Lecture: Professor Jutta Allmendinger
