Changing household characteristics and the away-from-home food market: a censored equation system approach

The American consumer is obtaining more-and-more of his or her food at a restaurant, and that worries some people concerned with the Nation’s dietary health. To date, much of this concern seems to be directed at the fast food segment of the restaurant industry. This paper asks whether targeting one segment of the industry, such as fast food restaurants, is justified, or whether a more balanced view of eating away from home is required. To answer this question, we look to the future and ask whether Americans can be expected to purchase increasingly more fast food or more-and-more of the foods typically associated with full-service dining. One view is that sales at full-service restaurants will now grow relatively faster than sales of fast food. The argument supporting this position rests on rising incomes, the aging of the population, smaller household sizes, and other changes taking place in the population. Using a new full-information maximum likelihood procedure for estimating a system of censored expenditure equations, we find evidence to support this argument.