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<p><p>We show that as household size increases, households substitute away from prepared foods and towards ingredients. They also devote more time to food preparation. These observations (1) are consistent with a simple model with home production, returns to scale in the time input to food preparation, and varieties of food that differ in the required time input; (2) support the idea that returns to scale in home production are an important source of returns to scale in consumption; and (3), mean that across household sizes, household market expenditures on food are not proportional to food consumption quantities. The latter may provide a partial explanation for a puzzle raised by Deaton and Paxson.</p></p>
Authors
Research Fellow University of Michigan
Tom is a Research Fellow at IFS, a Research Professor for the Institute for Social Research at the University of Michigan.
Yuqian Lu
Working Paper details
- DOI
- 10.1920/wp.ifs.2005.0503
- Publisher
- IFS
Suggested citation
Crossley, T and Lu, Y. (2005). Exploring the returns to scale in food preparation (baking penny buns at home). London: IFS. Available at: https://ifs.org.uk/publications/exploring-returns-scale-food-preparation-baking-penny-buns-home (accessed: 20 May 2024).
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