On the dynamics of food demand: a benefit function approach

Jean-Paul Chavas ()

European Review of Agricultural Economics, 2016, vol. 43, issue 3, 401-431

Abstract: Adequate food intake being necessary for good health and life suggests that food consumption has significant long-term effects on human welfare. This article develops an economic and econometric analysis of the dynamics of food demand. The model builds on duality and the benefit function. The research involves the specification and estimation of dynamic price-dependent demands as representations of marginal benefits. Applied to US aggregate data over the period 1948–2010, the analysis uncovers strong statistical evidence of demand dynamics, especially for food. We find that the negative effect of food consumption on the marginal benefit of food becomes much stronger in the long run. We also find that, while food and service are always complements, the strength of this complementarity relationship increases sharply in the longer run.

Date: 2016
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