Year of Publication

2014

Degree Name

Master of Science (MS)

Document Type

Master's Thesis

College

Agriculture, Food and Environment

Department

Agricultural Economics

First Advisor

Dr. Alison Davis

Abstract

This study examines the determinants of a household’s threshold price for a restaurant meal cost increase; the level of cost increase that would cause households to either eat in restaurants less frequently or change what they would typically purchase. The design of the study is formulated using a Tobit model to examine the threshold price by differing social, economic and demographic characteristics of households in Kentucky as well as their preferences for restaurant-specific characteristics.

The empirical estimates suggest that households that frequently have dinner at restaurants, households with higher incomes and households that strongly prefer full-service restaurants have a positive threshold price-range; which suggests that such households are more willing to pay an additional cost increase in restaurant meals. Conversely, households that always notice taxes before paying their checks, households close to retirement-age, and households that do not strongly prefer local-food restaurants have negative threshold price-range and are consequently less willing to pay an additional cost increase in restaurant meals.

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