Socioeconomic determinants of coffee intake: a multi-regional analysis

Abstract

Coffee is one of the most widely consumed beverages globally, with its consumption influenced by socio-economic factors, such as income levels, pricing, and regional preferences. This study examined the relationships between income and coffee consumption across different regions to analyze whether coffee behaves as a normal good. Using an unbalanced panel dataset from 53 countries, we incorporated key economic variables including Gross Domestic Product (GDP) per capita, coffee and tea consumption, and the prices of ground coffee and tea. A fixed-effects regression model was employed to assess the impact of income variations on coffee intake. The findings revealed significant regional disparities. For the European and African & Middle Eastern Regions, income showed a positive effect on coffee consumption when grouped with all variables. For the Asia–Pacific (APAC) and American regions, income within the regression showed no statistical significance whatsoever. Therefore, income appears, for half the regions, to be significant in determining coffee consumption, i.e., the more money one has, the more coffee they are able to consume, which reiterates that coffee is a normal good. These results contribute to the existing literature by providing a comparative regional analysis of income-driven coffee consumption. The findings also have practical implications for coffee producers, policymakers, and businesses seeking to understand market demands. Understanding regional coffee trends can support demand forecasting and pricing strategies. However, future studies should also examine consumer behavior and marketing dynamics.