Household Grocery Budgets—An Empirical Examination of Allocation Changes Due to Household Demographics

Abstract

Abstract The authors empirically examine changes in household grocery budget allocation using IRI panel data for 2001, which track more than 4,000 panel households’ specific purchases of 31 product categories across supermarkets and drug stores, while recording total purchases for all other categories. They then use an almost ideal demand system (AIDS) model to measure the impact of household demographics on grocery budget allocation over the 31 product categories. The household demographic variables used include marital status, presence of children including small children, occupation, household size, age, and other demographics, while also using grocery-specific variables—total grocery spending, prices, and total grocery shopping frequency. They find household demographics especially occupation and family variables, do affect grocery budget allocation, and that their effect is exercised much more through prices than through the total grocery budget.