The Role of Income in Explaining the Shift from Preserved to Fresh Vegetable Purchases

Abstract

Between 1991 and 2013, the share of fresh vegetables consumed rose from 47% to 56%. While median incomes grew 7.9%, the growth was uneven, with negligible growth occurring in the bottom two quintiles. Estimating an EASI demand system for fresh and preserved vegetables that accounts for corner solutions, we find that income elasticities are larger for fresh vegetables than for preserved vegetables for consumers in the top three but not the bottom two income quintiles. Simulations accounting for uneven income growth indicate that income growth accounts for 0.7 percentage points of the 9 percentage point increase in fresh share.

Keywords

• corner solutions
• easi demand
• engel curves
• vegetable demand