Whether trying to understand the impact of taxes, animal welfare regulations, or meat packing plant shutdowns, we need an elasticity of demand for pork. The elasticity of demand tell us how the quantity of pork consumers want to buy changes with the price of pork. Given the importance of such questions, it probably isn’t surprising to learn that there are many studies aiming to measure elasticties of demand. These studies typically focus on THE elasticity of demand for pork - a single aggregate number. However, these aggregate assessments likely mask a great deal of heterogeneity across markets and different products.
In some new research with Glynn Tonsor, done for the National Pork Board, we utilized grocery store scanner data from 51 U.S. retail markets for 6 different pork products to estimate 51*6 = 306 market- and product-specific own-price elasticity estimates. Our data also enables us to observe differences in consumer purchasing and spending patterns across the country.
There are so many interesting results, it’s hard to succinctly summarize. Here are a few highlights.
First, consider variation in bacon purchases across four markets over time. Of the four locations in the figure below, per-capita bacon purchases tend to be highest in Phoenix and lowest in LA (it is worth noting that bacon prices tend to be much higher in LA than Phoenix). The impact of the initial COVID-19 disruptions is also apparent in the data.
There is wide variation in price sensitivity across location and pork product. The figure below summarizes the distribution of price elasticities over the 51 markets for the six pork products
Want to know how your locale ranks in terms of consumption, prices, or elasticity? Check out the full report.