CONSUMERS’ DECISIONS ON CALORIES, FAT, AND CARBOHYDRATES WITH RESPECT TO FOOD PRICES AND EXPENDITURES

Abstract

Obesity is a big health issue in the developed world, especially in the US. This has led to a call to implement policies to control obesity. The major materials thought to contribute to obesity are calories, fat, and carbohydrates. In previous research, consumer’s reactions to these materials have been studied separately. However, these three materials have different adverse effects in the process of metabolism. Therefore, it is important to study these three materials simultaneously to in order to develop effective policies to control obesity. This study uses the Theil/Nelson model of characteristics to develop a set of food price and expenditure elasticities for three materials: calories, fat and carbohydrates. Some results include: 1) Consumption decision on calories, fat, and carbohydrates to food prices and expenditures are different, so studying obesogenic materials simultaneously is essential. 2) A composite commodity tax on fats and oils is effective for the US total population, but might not be effective for the poor population.