Food price elasticity estimates in Australia

Fiscal food policies can be used, among others, to minimize the burden of diet-related diseases. To inform the design of such policies in Australia, we used the large grocery-purchasing dataset NielsenIQ Homescan to estimate own-price elasticities and cross-price elasticities for 18 food categories. We found that households were most responsive to changes in price for non-sugar-sweetened beverages and sugar-sweetened beverages: a 10% increase in price was associated with reductions in demand of 15% and 12%, respectively. Additionally, an increase in the price of one category was associated with relatively small changes in the quantity demanded for other categories (that is, 92% of cross-price elasticities had an absolute value <0.2). There were small differences in own-price and cross-price elasticities across socioeconomic quintiles. These price elasticity estimates can be used to model the health and equity impacts of fiscal food policies in Australia. Food price elasticities are key to the design of policy interventions aimed at shifting food consumption. Using a comprehensive longitudinal dataset of grocery purchases, this study calculates own-price and cross-price elasticities of demand for commonly consumed food categories in Australia, both at the population level and for different socioeconomic groups.