DP10096 Shopping around? How households adjusted food spending over the Great Recession

Author(s): Rachel Griffith, Martin O'Connell, Kate Smith
Publication Date: August 2014
Keyword(s): nutrition, opportunity cost of time, shopping behaviour
JEL(s): D12, I31
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=10096

Over the Great Recession real wages stagnated and unemployment increased. Concurrently, food prices rose sharply, outstripping growth in food expenditure, and leading to a reduction in calories purchased. This has led to concern about rising food poverty. We study British households to assess how they adjusted to changes in the economic environment. We show they switched to cheaper calories; implying food consumption was smoother than expenditure. We use longitudinal data to quantify the way households lowered their per calorie spending, and show they done this in part by increasing shopping effort, and without lowering the nutritional quality of their groceries.