Who Are Consuming Hemp Products in the U.S.? Evidence from Nielsen Homescan Data

Abstract

The objective of this study is to identify critical consumer-demographic characteristics that are associated with the consumption of hemp products and investigate their effect on total expenditure in the U.S. by utilizing Nielsen consumer panel data from 2008 to 2015. To estimate the likelihood of market participation and consumption level, Heckman selection model is employed using the maximum likelihood estimation procedure. Results indicate marketing strategies targeting consumers with higher education and income levels can attract new customers and increase sales from current consumers. Head-of-household age in different regions shows mixed effects on decisions to purchase hemp products and consumption levels. Findings will provide a basic understanding of a consumer profile and overall hemp market since no empirical studies of hemp in the U.S market exist. As the industry continues to move forward, policymakers are going to need a deeper understanding of the factors driving the industry if they are going to create regulations that support the development of the industry.