Abstract:
There is considerable evidence to support the
hypothesis that seafood, poultry and meat are close
substitutes in consumer demand. Thus the relationships
among prices are important in determining consumption
patterns among these protein sources. In addition, there
are at least two kinds of outlets in which seafood, poultry
and meat are sold to consumers: retail stores, including
supermarkets, and away-from-home outlets, including
restaurants.
Because restaurants and retail stores add different
sets of services to their products (dining facilities vs.
packaging, for example), one would expect the price
relationships among the three protein categories to be
different, as between the two outlets. In turn, this should
lead to consumption patterns that are different in
restaurants than in retail stores.
Some, however, argue that this is not the case because
the different prices in the two outlets can be assigned
directly to the services provided by the respective outlets
and thus should not be included in the prices of the protein
items themselves. Under this argument, there should be no
differences in the consumption patterns as between the two
outlets.
This study presents a theoretical background and model
of the issue, reviews the competing hypotheses, and performs
an empirical test. Unfortunately, neither hypothesis can be
supported from the observations of a restaurant that
participated in the study. However, supplemental data from
a family restaurant chain provides evidence that the
consumption ratios of the two protein sources is not
responsive to change in the prices of the services provided.
