Food-Away-from-Home Expenditure in Mexico during the COVID-19 Pandemic: A Micro-Econometric Analysis

Abstract

Disruptive events such as the coronavirus disease 2019 (COVID-19) pandemic have the potential to reshape even the most basic human systems and behaviors, including those related to food production, acquisition, and consumption. This paper provides an in-depth analysis of how the pandemic has changed the ratio of food-away-from-home (FAFH) expenditure to income in Mexico, as well as participation in this market. In 2020, household participation in FAFH expenditures declined in all income deciles and regions, but the impact on household shares is far from uniform. Using a detailed national database of household income and expenditures (N = 87,274), an Engel curve of the Working-Lesser functional form for FAFH including 19 independent variables was estimated using the Heckman method appropriate for censored response data. The results provide statistically significant estimates for income, which both increases the probability of participation in this expenditure and has a negative relationship with its budget share. The number of older adults and the exposure to food insecurity during the pandemic similarly limit participation and increase the budget share. In addition, remittances encourage participation and decrease the budget share. The corrected conditional income elasticity for FAFH is 0.4609; the sign and magnitude indicate that FAFH behaved as a necessary good in Mexico for the proportion of households that maintained spending during the lockdown conditions (about one-third of the sample). An increase or decrease in income will lead to a corresponding change in FAFH expenditure, but the change will be less than proportional.