HOW DOES U.S. REDUCE THE FOOD WASTE BY PREDICTING FOOD AWAY FROM HOME AND FOOD AT HOME?

Abstract

This study examines the relationship among consumer confidence, food away from home (FAFH) and food at home (FAH) in the U.S. to figure out the high potential food sector for reducing food waste. Specifically, this paper uses the monthly data from January 2010 to December 2020 and the threshold vector error correction model (TVECM) for the analysis. Our test results of Johansen cointegration and threshold cointegration show that pairs of consumer confidence–FAFH and consumer confidence–FAH have a nonlinear long-run relationship. According to TVECM results, consumer confidence has a positive long-run Granger causation on FAFH approximately 93% (regimes 2 and 3), and on FAH over 5.4% (regime 3). About 7% of periods (regime 1) not included for a long-run Granger causation of consumer confidence on FAFH, and 5.4% period on FAH pertain to the COVID-19 period. Therefore, we conclude that a positive long-run Granger causation of consumer confidence on food consumption in the U.S. exists only in the FAFH. Based on our results, the policy implication is that the U.S. should focus on the FAFH to reduce food waste by predicting food demand to manage food stock.