Christine Burggraf

ECONOMIC GROWTH AND NUTRITION TRANSITION: AN EMPIRICAL ANALYSIS COMPARING DEMAND ELASTICITIES FOR FOODS IN CHINA AND RUSSIA

This study provides empirical evidence on the link between economic growth and nutrition transition in two emerging economies, China and Russia. Both countries have experienced rising average incomes, accompanied by an increasing rate of nutrition-related chronic diseases in recent years. Given the regional heterogeneity between these two countries, we analyze the extent to which income growth as a major driver of nutrition transition has a significant effect on the consumption of different food aggregates and how these effects differ between Chinese and Russian consumers. Our results indicate that with increasing household incomes over time the demand for carbohydrates decreases, while the demand for meat and dairy products, as well as fruits increases. This is a development generally known as nutrition transition. Further, we estimate a Quadratic Almost Ideal Demand System (QUAIDS) for nine different food aggregates for China and Russia. Our results indicate that in both countries all food aggregates have positive expenditure elasticities and are thus normal goods. Moreover, our results indicate that in 2008/2009 meat is still a luxury good in China yet a necessity good in Russia. For 2009, the highest own-price elasticities in China are found for non-meat protein sources and dairy products. Within the meat group, beef, poultry and mutton have the highest price elasticities in China. In Russia, the milk and dairy group, together with the vegetable group, is the most price-elastic food group in 2008. In line with the definition of a nutrition transition, our overall results underscore the finding that income growth in China and Russia tends to increase the demand for animal-based products much stronger than, for example, the demand for carbohydrates. Despite being a positive signal for problems of malnutrition in rural China, this trend of increasing meat consumption might further increase the incidence of chronic diseases in urban areas since there is convincing scientific evidence that increasing meat consumption, especially red and processed meat, is associated with an increased risk of chronic diseases.

Unshakable loyalty in the food sector: sustainable customer retention. Empirical study of organic food consumers in Germany

Because of high competitive pressure in the food sector producers and retailers constantly increase their marketing efforts to convince consumers of their own products, services, brands or stores. One of the main goals is to generate loyal consumers because they are less likely to switch to competitors and more tolerant of price increases than non-loyal consumers. But what is true consumer loyalty? Repurchases are often used as an approximate indicator of loyalty. But the marketing literature emphasises that to identify “true loyalty” it is important to consider both consumers’ purchasing patterns as well as consumers’ underlying attitudes. Thus, true loyalty includes both a behavioural component, which results in repeated purchases, and an attitudinal component, which results in a dispositional commitment to a product, brand, or company and associates a unique value with it. However, regarding the food sector and the characteristics of food products, the question arises whether the above mentioned strict definition of true consumer loyalty can be applied to the food sector. Our paper aims to empirically test this question. To do so we conducted 27 semi-structured in-depth interviews with regular customers of a German organic food retailer in March/April 2009.ZusammenfassungAufgrund des starken Wettbewerbs im Lebensmittelsektor sehen sich Hersteller und Händler zu stetig steigenden Ausgaben für ihre Marketingaktivitäten veranlasst, um die Konsumenten an ihre eigenen Produkte, Dienstleistungen, Marken oder Geschäftsstätten zu binden. Eines der wichtigsten Ziele ihrer Marketingaktivitäten ist dabei die Generierung von Kundentreue, da bei treuen Kunden ein Wechsel zur Konkurrenz weniger wahrscheinlich ist und sie nachweislich eine geringere Preiselastizität der Nachfrage als nicht treue Kunden aufweisen. Doch welche Merkmale zeichnen einen treuen Kunden aus? Oftmals werden Wiederholungskäufe als ein Treueverhalten angesehen. Die Marketingliteratur betont jedoch, dass bei „echter Kundentreue“ sowohl die quantifizierbaren Kaufverhaltensmuster der Kunden wie auch die diesem Verhalten zugrundeliegende Einstellung zu berücksichtigen ist. Entsprechend beinhaltet „echte Treue“ beides: eine Verhaltenskomponente, die sich in Wiederholungskäufen äußert und eine Einstellungskomponente, die in einer freiwilligen positiven Bindung an das Produkt, die Dienstleistung, Marke oder Geschäftsstätte resultiert und einen besonderen Wert zuschreibt. Es stellt sich jedoch die Frage, ob diese strenge Definition von echter Kundentreue auch unter Berücksichtigung der Gegebenheiten im Lebensmittelsektor und den Eigenschaften von Lebensmitteln anwendbar ist. Ziel dieses Artikels ist es, diese Frage empirisch zu überprüfen. Hierfür wurden im März/April 2009 insgesamt 27 teilstandardisierte Tiefeninterviews mit Stammkunden eines deutschen Bio-Lebensmittelhändlers durchgeführt.

New impacts of Grossman’s health investment model and the Russian demand for medical care

AimBy analyzing the Russian demand for medical care, we aim to highlight the practical relevance of Grossman’s health investment model, one of the most important developments in health economic theory.Subjects and methodsWe refer to the often-criticized inconsistencies between the health investment model’s theoretical implications and its empirical results. While the theoretical model implies, inter alia, that the demand for medical care increases with improving health, empirical tests show conflicting results. In order to solve this inconsistency, we specify the model’s inherent health investment production function to be of decreasing rather than constant returns to scale. Afterwards, we employ our derived structural demand function for medical care in an empirical panel analysis using data from the Russia Longitudinal Monitoring Survey for 1996–2008.ResultsIn contrast to other studies, we show that even Grossman’s standard model setting generates a structural demand function for medical care that implies sick people use more medical care, provided that the functional form of the health investment production function is properly specified. Further, our empirical analysis affirms our theoretically derived implications and provides important new insights into the Russian demand for medical care.ConclusionsGrossman’s health investment model is of practical relevance to health economists.

Economic growth and the demand for dietary quality: Evidence from Russia during transition

The increasing incidence of nutrition-related chronic diseases worldwide has raised peoples awareness of dietary quality. Most existing studies on the topic of changing nutrition patterns measure dietary quality by single macronutrient indicators or anthropometric outcomes. However, such an approach is often too narrow to provide a picture of overall dietary quality and is sometimes even misleading. This study contributes to the existing literature by taking into account that the analysis of dietary quality comprises two dimensions: the adequate intake of vitamins and minerals, as well as the moderate intake of nutrients that increase the risk of chronic diseases. Thereby, we apply Grossmans health investment model to the analysis of the demand for dietary quality, explicitly addressing the different dimensions of dietary quality and the intertemporal character of health investments. We apply our approach to Russia using data from the Russia Longitudinal Monitoring Survey from 1996 to 2008. Our results show that intake levels of vitamins and minerals as well as saturated and total fatty acids increased after 1998 along with economic recovery, while the intake of fiber decreased. Our econometric results imply an income elasticity of vitamins and minerals of 0.051, and an income elasticity of fats of 0.073. Overall, our results are in line with an ongoing nutrition transition in the Russian Federation, which is marked by decreasing deficiencies in vitamins and minerals, as well as the increasing consumption of fats with its accompanying negative health consequences.