$550,000 grant supports VT researchers to study the effects of changing food spending patterns

Virginia TechJan 2 2024

After a long day, there's the age-old question of do we eat out or stay in?

Over the last decade, that answer has increasingly shifted to eating out.

In that timeframe, households have increasingly spent more money on food outside of the home than what's spent on eating at home. In that same time, the farmer's share of the food dollar eaten outside of the home has declined while the share of food eaten at home has increased.

With a more than $550,000 grant from the National Institute of Food and Agriculture, researchers George Davis and Anubhab Gupta, in the Department of Agricultural and Applied Economics in Virginia Tech's College of Agriculture and Life Sciences, are studying the effects of the changing food spending patterns on the profitability and welfare of farmers, food processors, and consumers, or welfare through the United States' food supply chain.

Our project aims to look at the changing profitability and welfare effects in the food supply chain while recognizing that the effects will depend on the underlying market structure and consumer socioeconomic, demographic, and environmental factors."

George Davis, professor in the Department of Agricultural and Applied Economics and project lead

The research team has four objectives:

• Look at how the difference between retail food prices and farm prices have changed over time as spending on food at home and food away from home has changed
• Determine to what extent consumers have benefitted from the change in eating food at home versus food away from home.
• Consider what role the degree of competition within the food supply chain has affected profitability and welfare for the farmer, processors, and consumers as food spending patterns have changed.
• Consider how alternative policies affecting food at home and food away from home spending will affect profitability and welfare throughout the food supply chain.

The project will combine well-established research areas that have not been joined before to understand important policy-relevant questions regarding price and quantity relationships, market structure, and welfare distribution throughout the associated market.

To achieve the objectives, the team will utilize public-use consumer expenditure survey microdata from the Bureau of Labor Statistics, NBER-CES Manufacturing Industry Database, and estimates from the literature.

"Our integrated framework will answer important policy and scenario questions related to socioeconomic and demographic profile of consumers, COVID-19, Ukraine war, etc. on welfare distribution throughout the food supply chain, while extending our knowledge on the four strands of literature and a unique way of integrating them," Davis said.