An Economic Analysis of Fresh Fruit and Vegetable Consumption: Implications for Overweight and Obesity among Higher- and Lower-Income Consumers

impacts on sales of all sub-categories of vegetables. All elasticity estimates are less than one and
therefore all sub-categories of vegetables are what economists would describe as necessary
goods. Mixed results are shown for the lagged dependent variable, suggesting that habit
persistence is not a major determinant of vegetable consumption.

The estimated own-price elasticity for greens is highly inelastic (-.37) and statistically
significant, but no price sensitivity difference is shown for higher- and lower-income consumers.
For lower-income consumers, this was the least expensive of all vegetables and therefore greens
fall into the same class as bananas as having the lowest price-elasticity among the six sub-
categories of vegetables. Unlike bananas, greens do not represent the highest consumption sub-
category of vegetables, as this distinction is reserved for major vegetables. Yet, despite the
highly inelastic demand for greens, lower-income consumers paid an average of $.84 less per
pound (Table 2 and Graph 5). This price disparity suggests entirely different purchasing
bundles, perhaps determined as much by preferences as by price.

Lower-income consumers are shown to be more price sensitive in their purchases of
fresh-cut salads (-1.11 vs -.91). For lower-income consumers, the share of fresh-cut salad
vegetables is comparable to that of greens; for higher-income consumers, the share is almost
three times that of greens. Given that fresh-cut salads are the highest-priced of all sub-categories
of vegetables, disparities in consumption shares for the two income groups are to be expected if
income constraints are binding for one group, but not for the other. Yet, lower-income
consumers are shown to shop selectively within this sub-category as they paid an average of
$2.65 per pound, compared to $3.67 paid by higher-income consumers. These price differences
obviously reflect different purchase bundles, just as one would hypothesize given an inelastic
demand for one group and an elastic demand for the other.

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