Obesity, food demand, and models of rational consumer behaviour: econometric analyses and challenges to theory

Type Thesis or Dissertation - PhD
Title Obesity, food demand, and models of rational consumer behaviour: econometric analyses and challenges to theory
Author(s)
Publication (Day/Month/Year) 2014
URL http://geb.uni-giessen.de/geb/volltexte/2014/10991/pdf/StaudigelMatthias_2014_03_27.pdf
Abstract
The rapid increase of overweight, obesity and associated diseases worldwide constitutes a central health problem at the beginning of the new millennium. Debates on soaring costs for public health systems or over the introduction of taxes on “unhealthy” food products illustrate the topic’s relevance for economic research. Thereby, interdependencies between food demand, consumer behaviour, and obesity are special points of interest examined by this dissertation.
A central question, especially important for assessing potential effects of taxes, is how variation in food prices affects body weight outcomes. We further need to know whether consumers of different weight categories show different behaviour with respect to food demand and whether they deviate in terms of quality or quantity. Regarding the global dimension of the obesity problem, the nature of food demand in emerging economies is of particular interest. Here, important questions are how consumer behaviour changed over time and whether differences exist across population subgroups.
In order to analyse and quantify the relevant relationships, the dissertation employs econometric and multivariate techniques on the basis of neoclassical models of demand theory and household production theory, in particular. The „Russia Longitudinal Monitoring Survey“ (RLMS) serves as database that is ideally suited for this kind of analyses, both in terms of structure and content and in terms of Russia as object of research.
The results of the dissertation support a clear rejection of fiscal measures like fat taxes aimed at reducing obesity. Estimates of price-weight elasticities assumed absolute values smaller than 0.01. Hence, variation in food prices has only a small to no effect on the Body Mass Index. The empirical analysis further shows that even substantial economic fluctuations as experienced by Russians during transition have negligible effects on energy intake. Estimates indicate that the expenditure elasticity of energy is very low at around 0.07. People in Russia have managed to adjust to economic changes by switching between more expensive and cheaper food products. Thereby, obese people seem to be more flexible in terms of what they spend per unit of food item than normal-weight people.
Estimates from a two-stage LES-LA/AIDS model suggest that demand for food is by far not satiated in Russia and substantial increases in consumption of food-away-from-home, meat, alcohol, and tobacco are to be expected. In contrast, staple foods like bread or cereals as well as food production at home lose in importance. Food demand behavior differs strongly across consumer segments. More affluent, urban households increasingly emulate Western demand patterns, while the majority of Russian households have to content themselves with rather simple food baskets.

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