A conceptual and empirical framework to analyze the economics of consumer food waste

Highlights

• We find that if there is a reduction in the rate of at-home consumer food waste:

• Purchases and purchase prices will decline if demand is price inelastic and will increase otherwise.

• Effective consumer prices always decline, regardless if the quantity and price of food purchases increase or decrease.

• Consumption always increases (provided there are no costs of disposition; otherwise it is ambiguous, depending on the cost of disposition and the demand elasticity).

Abstract

We develop a microeconomic model to understand food waste of consumers. We capture at-home and away-from home food consumption and distinguish between food purchases and food consumption. We allow the consumer to choose the rate of food waste at home optimally to maximize her utility. We show that consumer purchases can decline or increase with a cut in the rate of consumer waste, depending on the elasticity of food demand. Using the UK data for poultry in 2012, we also show a case where for a price elastic demand food consumption increases with a reduction in the food waste rate, but food purchases (retail sales) increase.