Date of Award
5-1-2024
Degree Name
Master of Science
Department
Agribusiness Economics
First Advisor
Moon, Wanki
Abstract
In this thesis, I examined the impact of income and employment on consumption of food and beverages in USA by states. Data from 2012 to 2021 from 50 states in USA were used. I analyzed the data using the panel regression as my baseline model. Using panel data models allowed controlling for time invariant unobserved state -specific factors that could bias the estimates. I estimated a fixed effect panel regression to examine the relationship between Income and Employment with Consumption of food and beverages . The results of the fixed effect panel regression showed that Income is significant. There was a steady change in Income elasticities from year 2012 to 2019. However, the elasticities greatly increased in 2020 and 2021. This shows that the pattern of the relationship between food consumption and Income has shifted for some reasons. From 2012 to 2019, the percentage changes in Income were greater than the percentage changes in food consumption . However, 2020 and 2021 had different outcomes from the other years. For these years, percentage changes in consumption of food and beverages were greater than those of Income. I also estimated a Random Effect Regression Using both States and Years. The results showed a positive correlation of Consumption of Food and Beverages with Income, but a negative association with Employment. This method deduced Income (X1) to be the only significant variable when ‘years’ were used as dummy variables. The two variables (Income and Employment) were significant when ‘States’ were used. Hausman test was carried out and the result suggested that the Fixed effect model is the most appropriate method to use for estimation. It was concluded that Income has a significant impact on consumption of food and beverages.
Access
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