Policy Impacts on Fresh, Canned, Dried, and Frozen Fruit Consumption: A Censored Demand System Approach

Abstract: We investigate consumers ’ demand for fresh and processed fruit by applying a two-step estimation procedure to a Quadratic Expenditure System. Using homescan data, we find that household size, income, region, and price significantly affect fruit purchases. We estimate own-price and cross-price elasticities and expenditure elasticities for 18 categories of fruit. More processed fruits serve as substitutes for fresh fruits than complements. Often fresh fruits act as normal goods, and processed fruits as inferior goods. Providing a retail subsidy for fresh fruit or imposing a tax on canned and (or) dried fruit could promote fresh fruit consumption for a healthier diet