A nested logit model of the determinants of away-from-home food consumption Public Deposited

http://ir.library.oregonstate.edu/concern/graduate_thesis_or_dissertations/m900nx046

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  • The increasing demand for meals eaten away from home has increased the interest in developing a more complete understanding of the food-away-from-home (FAFH) consumption patterns in the United States. Previous studies have examined factors that explain variations in FAFH expenditures in the aggregate. However, no previous examinations have dealt with the relationship between FAFH consumption and meal price. The National Panel Diary (NPD) data for the year 1989 were used for the analysis. A sub-sample of single person households was chosen to permit estimation of meal prices. The data set contains demographic information and purchase information. The three step nested logit model was used to examine the FAFH decision behavior process as a whole. These steps are: first, the consumer decides whether to eat out; second, if he/she decides to dine out then he/she chooses the type of food facility fast-food, mid-scale, or up-scale facility - to patronize; and third, given the food facility, the consumer chooses from among five food categories: beef, pork, poultry, seafood and other foods. It is at the third stage that price is hypothesized to play its most important role. With respect to the role of price in selecting particular food categories, the estimated price elasticities of demand were negative in all cases except for beef in the fast-food facilities and beef and seafood in up-scale restaurants. Two possible explanations are offered to explain the positive price elasticities: the relative price effect and Giffen behavior. Other findings for particular food categories emerged. Midwest households (single-person) have a higher probability of choosing beef and pork, when compared to households from the other regions. South, West, and Northeast households show a higher likelihood of choosing seafood products when dining at up-scale restaurants.
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