Thursday 5th October 2009 Pamela Murphy Dr. Carol Newman, TCD Dr. Maeve Henchion, AFRC

1. An Empirical Analysis of Demand and Demographics for Healthy Eating in Ireland, Categorised Using the Food Pyramid. Thursday 5th October 2009 Pamela Murphy Dr. Carol Newman, TCD Dr. Maeve Henchion, AFRC Dr. Sinead McCarthy, AFRC 1

2. Research Question and Contribution To investigate the impact of economic change in food expenditure during the decade 1994 to 2004 with referance to the food pyramid Determine if Irish food choices are changing by examining types of food choice, with a paticular emphasis of a movement towards or away from healthy eating. To model an aggregate food demand system whilst also considering the potential effects of demographic and socio-economic factors.

3. Data Sources Irish Household Budget Surveys (HBS) from 1994, 1999 and 2004. Collected by the Central Statistics Office (CSO). 2 week food expenditure diary. Approximately 7,500 households surveyed every 5 years. Representative sample of households in the Republic of Ireland.

4. Methodology Recode approx 350 food and beverage items from HBS using the Eurocode method of food classification and the food pyramid. Adjust data for inflation using CPI index (2006 = base year). Adjust data for household size using OECD equivalence scale. Dummy variables were constructed for all explanatory variables with more than 2 categories. Use seemingly unrelated regressions (SUR) to simultaneously regress all 5 dependent food groups for each of the three survey years. Determine food demand using Almost Ideal Demand System (AIDS) model. Developed by Deaton & Muellbauer in 1980

5. AIDS Model - Empirical Specifications General Model : Where: is the budget share associated with the th good is the constant (intercept) co-efficient in the th share equation. is the slope (price) co-efficient associated with the in the th good, in the th share equation. is the price of the th good. is the expenditure co-efficient X is the total expenditure on goods in the system of goods given by: is a price index

6. AIDS Model & SUR AIDS models concentrates on price and expenditure. This project is more interested in explaining how demographics affect the decision to consume certain food groupings, thus a modified format of the AIDS model will be used. Households must allocate their total spending among goods, given prices Total expenditure for household is defined by: Seemingly Unrelated Regression (Micheline, 1998) (Rank 3 demand system) This will look at the relationship between the budget share, disposable income and disposable income squared plus other explanatory variables, including a number of proxy variables.

7. Dependent Variables Oils & fats Sugar & chocolate Beverages Miscellaneous Top Alcohol Takeaway meals Eggs Topmiddle Meat Milk Middle Vegetables Fruit Endmiddle Grains Pulses & nuts End Potatoes

8. Results – (SUR)

9. Results (SUR) - continued

10. Results (SUR) - continued

11. Conclusion and Future Plan Steady increase in spending at the top of the food pyramid i.e. foods high in fat and sugar plus alcohol. The relationship between household expenditure and household characteristics is important in explaining the allocation of household expenditure to consumer goods Price information not contained in the HBS will be obtained prior to estimation of the AIDS model. Non linear version of SUR will also be estimated AIDS (linear) or QAIDS (non-linear) model will be used to estimate the demand elasticities.