The Dynamics of Individuals' Fat Consumption

Abstract

Consumers are increasingly aware of the link between their lifestyle choices and the risk of noncommunicable diseases. A dynamic approach incorporating this linkage in food demand is developed, where consumers maximize utility over time by choosing fat intake to control their cumulative fat level. The resulting dynamic indirect utility function and household data on meat, fish, and dairy consumption are used to estimate a censored demand system. Results show that consumers consciously adjust, but not instantaneously, their cumulative fat level. Highly educated households have a faster rate of adjustment of cumulative fat. When cumulative fat level increases, consumers shift to dairy or white meat from red meat products.