Estimating the Relationship between Food Prices and Food Consumption—Methods Matter

Laura Cornelsen, Mario Mazzocchi, Rosemary Green, Alan D. Dangour and Richard D. Smith

Applied Economic Perspectives and Policy, 2016, vol. 38, issue 3, 546-561

Abstract: Concerns about the growing prevalence of obesity worldwide have led researchers and policy makers to investigate the potential health impact of fiscal policies such as taxes on unhealthy foods. A common instrument used to measure the relationship between food prices and food consumption is the price elasticity of demand. Using meta-regression analysis we assessed how differences in methodological approaches to estimating demand affected food price elasticities. Most methodological differences had a statistically significant impact on elasticity estimates, which stresses the importance of using meta-estimates or testing the sensitivity of simulation outcomes to a range of elasticity parameters before drawing policy conclusions.

Date: 2016
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