The Basket-Based Choice Experiment: A Method for Food Demand Policy Analysis. (May 2022)

• Record Type: Journal Article
• Authors: Caputo, Vincenzina; Lusk, Jayson L.
• Is Part Of: Food policy. Volume 109(2022)
• Publication Date: 2022-05
• Subjects: Basket-based choice experiment -- New policy method -- Multiple discrete choices -- Consumer -- Food policies -- Multivariate logit; Food supply -- Periodicals; Food security -- Periodicals; Food -- Quality -- Periodicals; Food Supply -- Periodicals; Alimentation -- Périodiques; Electronic journals; 338.1905
• DOI: 10.1016/j.foodpol.2022.102252
• Languages: English
• ISSNs: 0306-9192

Abstract

Highlights: We introduce a basket-based choice experiment (BBCE), a new food choice design. The BBCE allows researchers to capture substitution and complementary patterns. The BBCE can be used for policy related applications affecting multiple food items. This includes impacts of price changes and product bans on health and environment. We show that price increases for meat products affect welfare and dietary nutrients. Abstract: Although economic research on food consumer demand has exploded in recent years, most survey demand elicitation approaches have substantial limitations for food policy evaluations as they involve consumers choosing only one item out of a bundle. There is a need to design a more flexible approach capturing more realistic consumption patterns. This study introduces such an approach – a basket-based choice experiment – where consumers select their preferred food item or combination thereof. Our basket-based choice experiment includes 21 food items that can be freely combined to construct over 2 million possible baskets. Our results show that when given the opportunity, consumers select multiple items for their basket, most commonly three or four items. A composite conditional likelihood function approach is used to reduce the computational burden associated with modeling the choice of over 2 million possible baskets, and estimates are utilized in a multivariate logit model to calculate the probability of bundle selection and individual food price elasticities. Unlike typical choice experiments utilizing multinomial logit model variants, which forces products to be demand substitutes, our basket-based approach is able to capture a rich set of substitution and complementary patterns, and we find that most of the 21 food items studied are demand complements. The BBCE is used to explore policy questions related to the impacts of changing prices on the healthfulness of consumer dietary choices and the welfare effects of product bans, such as Meatless Monday.