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AbstractThis article examines the determinants and impacts of rising market concentration in food retail. We argue that the differentiated nature of food retail complicates the common assumption that rising market concentration is evidence of growing market power and rising prices. We provide a theoretical explanation for rising market concentration but relatively unchanging market power and prices. We also provide empirical data on prices, gross margins, profit margins, and demand elasticities to support our hypothesis that rising fixed costs have been the main driver of rising market concentration with little impact on market power and prices.

AbstractHousehold food expenditure has shifted away from Food at Home (FAH) and towards Food Away from Home (FAFH). Prior to the COVID‐19 pandemic, FAFH's share of food expenditure surpassed that of FAH, reaching 55% in 2019. Yet economic research on FAFH and the interaction of FAFH and FAH has been limited. Combining scanner data for meat sales in grocery stores with data for FAFH expenditure, we estimate a model of demand for at‐home meat, incorporating FAFH expenditure as a demand shifter. We quantify substitution between FAFH expenditure and FAH meat and quantify the impact of the COVID‐19 disruptions to the food service sector on retail prices of FAH meat.

AbstractEligibility requirements for farm payments include restrictions from planting certain horticultural crops on base acres, and U.S. commitments under the WTO have brought pressure to remove such restrictions. Using a difference‐in‐difference estimator, we measure the effects of the planting restriction on acres planted to horticultural and program crops using U.S. county‐level data from both the 1987 and 1997 U.S. Census of Agriculture, that is, both before and after the initial policy was introduced in 1990. We find that the planting restriction has crowded out fruit and vegetable acreage nationally, and most notably in selected Sunbelt states, a region that specializes in horticultural crop production. The key policy implication is that the removal of the planting restriction may have a nontrivial impact on U.S. fruit and vegetable production.

AbstractThis article analyzes household food purchase behavior in response to changes in product package size. In particular, we exploit food manufacturer package downsizing strategy and design a difference‐in‐difference analysis to track shifts in household purchase volume in affected and comparison product groups before and after package size changes. We use UPC‐level purchase data from a panel of households over a seven‐year period for analysis. Our empirical approach overcomes two important limitations of the extant literature: it (i) accounts for determinants of purchase behavior and (ii) produces results that elucidate the long‐term effects of package size changes. The main finding is that, on average, smaller package size significantly reduces household purchase volume, which indicates a positive correlation between package size and food‐at‐home consumption. The results also show that downsizing does not have a significant effect on the purchase volume of non‐downsized products and on the number of packages purchased. The implications of the results for policy and potential interventions are discussed.