Determinants of demand for farm dairy products

• Název práce v češtině: Charakteristiky poptávky po farmářských mléčných výrobcích
• Název v anglickém jazyce: Determinants of demand for farm dairy products
• Klíčová slova: spotřebitelská poptávka, elasticita, mléčné výrobky, lokální produkty
• Klíčová slova anglicky: consumer demand, elasticity, dairy, local products
• Akademický rok vypsání: 2018/2019
• Typ práce: bakalářská práce
• Jazyk práce: angličtina
• Ústav: Institut ekonomických studií (23-IES)
• Vedoucí / školitel: Mgr. Ing. Šarlota Smutná, M.Sc.
• Řešitel: skrytý - zadáno vedoucím/školitelem
• Datum přihlášení: 28.05.2019
• Datum zadání: 28.05.2019
• Datum a čas obhajoby: 09.09.2020 09:00
• Místo konání obhajoby: Opletalova - Opletalova 26, O105, Opletalova - místn. č. 105
• Datum odevzdání elektronické podoby: 31.07.2020
• Datum proběhlé obhajoby: 09.09.2020
• Oponenti: Mgr. Barbara Pertold-Gebicka, M.A., Ph.D.

Zásady pro vypracování

Research question and motivation
According to the Association of Small and Medium-Sized Enterprises and Crafts of the Czech Republic (Břeňová 2016), people express high interest in the origin of food.  50% of Czechs buy regional products at least once a week and food represent 83% of regional products they buy (Friedlaenderová 2018). They also believe in high quality. As consumers’ concern for locally grown food rises, farmers and organizations are working on inventive ways to supply fresh and affordable local food to residents (Schmidt, Kolodinsky, DeSisto, Conte 2011). In the case of the Czech Republic, projects that join farmers and makes an easier distribution were created. The trend of local products was also reflected by supermarkets and food e-shops which try to attract consumers by special offers of farmers goods.
Another point of view suggests (Chovítek 2018) that consumers support local and organic food only during answering in the surveys. However, their behaviour changes when the trade-off between these aspects and price arises. Their attitude towards buying regional products has not even been reflected in changes in their consumer basket. People spend monthly 101-500 Kč on average for regional food (Friedlaenderová 2018).
The aim of this thesis is to explore the elasticity of demand for local farm products, specifically, for dairy products, the main segment where people care about the locality. Analysing data from specific farmers e-shop, we would like to estimate the evolution of demand behaviour
and identify characteristics of purchasing consumers.

Contribution
Several studies have already been done, mainly concentrated on understanding the consumers of regional products via a qualitative point of view, summarizing interviews and questionnaires (Miškolci 2017). In the thesis, we would like to utilize quantitative data, for estimating elasticities of demands in specific regions – mainly of Central Bohemia, Prague included. We will use the unique dataset described below. The question we would like to answer is if there is any difference between regions. Next, we would like to focus on a comparison of demand for local food and general demand for dairy products and analyse their evolution in the time. The contribution might be discovering potential differences and exploring how these demands are interconnected and how local retailers (farmers) could rely on the trends that general demand faces.

Methodology
We use two kinds of the dataset – one from a project that associates local farmers. More specifically, data from purchasing dairy products will be collected quarterly from 2016-2019, divided by regions. They will also be sorted to smaller categories depending on the type of dairy product. Data will be completed by qualitative information of consumers using questionnaires. The second dataset will be more general. We would like to use data of household consumption and average product price published by the Czech Statistical Office. Characteristics of consumers that are interested in local dairy products will be analysed via probit model, the demand elasticities (price and income elasticities and their evolution in time) will be estimated employing the panel data regression techniques.

Seznam odborné literatury

Andreyeva, T., Long, M. W., & Brownell, K. D. (2010). The impact of food prices on consumption: a systematic review of research on the price elasticity of demand for food. American journal of public health, 100(2), 216–222. doi:10.2105/AJPH.2008.151415

Břeňová A. (2016). Lokální producenti a pěstitelé dobývají spotřebitele [online]. Ipsos pro AMSP, 2016. Available from: http://amsp.cz/lokalni-producenti-a-pestitele-dobyvaji-spotrebitele/.

Friedlaenderová, H. (2018). Regionální potraviny a výrobky. [online]. Nielsen Admosphere pro Asociaci regionálních značek. 2018. Available from: https://docs.wixstatic.com/ugd/9b7c0e_dcf22f996dc844b38392731795b99210.pdf

Grunert, K. G. (2005). Food quality and safety: consumer perception and demand. European Review of Agricultural Economics, 32(3), 369–391. doi:10.1093/eurrag/jbi011 

Chovítek, B. (2018). Maloobchodní audit. [online]. Nielsen pro Svaz obchodu a cestovního ruchu, 2018. Available from: http://www.socr.cz/file/4558/TZ_SOCR_Nielsen_12_6_2018_final.pdf

Miškolci, S. (2017). Consumer Preferences Expressed via Shopping in Alternative Food Chains. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 65(1): 0311–0318.

Regmi, A., & Meade, B. (2013). Demand side drivers of global food security. Global Food Security, 2(3), 166–171. doi:10.1016/j.gfs.2013.08.001

Schmidt, M., Kolodinsky, J., DeSisto, T., & Conte, F. (2011). Increasing Farm Income and Local Food Access: A Case Study of a Collaborative Aggregation, Marketing, and Distribution Strategy That Links Farmers to Markets. Journal of Agriculture, Food Systems, and Community Development, 1(4), 157-175. https://doi.org/10.5304/jafscd.2011.014.017

Wier, M., O’Doherty Jensen, K., Andersen, L. M., & Millock, K. (2008). The character of demand in mature organic food markets: Great Britain and Denmark compared. Food Policy, 33(5), 406–421. doi:10.1016/j.foodpol.2008.01.002 

Wooldridge, J.M. (2013). Introductory econometrics: A modern approach (5thed.). Mason, OH: South-Western, Cengage Learning

Předběžná náplň práce v anglickém jazyce

Research question and motivation
According to the Association of Small and Medium-Sized Enterprises and Crafts of the Czech Republic (Břeňová 2016), people express high interest in the origin of food. 50% of Czechs buy regional products at least once a week and food represent 83% of regional products they buy (Friedlaenderová 2018). They also believe in high quality. As consumers’ concern for locally grown food rises, farmers and organizations are working on inventive ways to supply fresh and affordable local food to residents (Schmidt, Kolodinsky, DeSisto, Conte 2011). In the case of the Czech Republic, projects, that join farmers and makes an easier distribution, were created. The trend of local products was also reflected by supermarkets and food e-shops which try to attract consumers by special offers of farmer´s goods.
Another point of view suggests (Chovítek 2018), that consumers support local and organic food, only during answering in the surveys. However, their behaviour changes when the trade-off between these aspects and price arises. Their attitude towards buying regional products has not even been reflected in changes in their consumer basket. People spend monthly 101-500 Kč on average for regional food (Friedlaenderová 2018).
The aim of this thesis is to explore the elasticity of demand for local farm products, specifically, for dairy products, the main segment where people care about the locality. Analysing data from specific farmer´s e-shop we would like to estimate the evolution of demand behaviour and identify characteristics of purchasing consumers.


Contribution
Several studies have already been done, mainly concentrated on understanding the consumers of regional products via a qualitative point of view, summarizing interviews and questionnaires (Miškolci 2017). In the thesis, we would like to utilize quantitative data, for estimating elasticities of demands in specific regions – mainly of Central Bohemia, Prague included. We will use the unique dataset described below.
The question we would like to answer is if there is any difference between regions. Next, we would like to focus on a comparison of demand for local food and general demand for dairy products and analyse their evolution in the time.
The contribution might be discovering potential differences and exploring how these demands are interconnected and how local retailers (farmers) could rely on the trends that general demand faces.


Methodology
We use two kinds of the dataset – one from a project that associates local farmers. More specifically, data from purchasing dairy products will be collected quarterly from 2016-2019, divided by regions. They will also be sorted to smaller categories depending on the type of dairy product. Data will be completed by qualitative information of consumers using questionnaires.
The second dataset will be more general. We would like to use data of household consumption and average product price published by the Czech Statistical Office.
Characteristics of consumers that are interested in local dairy products will be analysed via probit model, the demand elasticities (price and income elasticities and their evolution in time) will be estimated employing the panel data regression techniques.

Outline
Introduction
a. Topic motivation
Literature review
a. Consumer demand theory and methodology
b. Demand for local and farm food
c. Demand for food in the Czech Republic
Description of data and Methodology
Own data analysis
Results
Conclusion