In bad economic times, Americans turn to pickles and beer. But when the good times roll, it's sausage and booze, according to a University of Nebraska agricultural economist who has studied how booms and busts affect our food-buying habits.
Azzeddine M. Azzam, director of the university's Center for Agricultural & Food Industrial Organization, examines what economists call "income elasticity" -- how demand for food and other products varies in response to changes in disposable income. Not surprisingly, Azzam and other economists have found big swings in demand for certain products, depending on whether Americans have relatively more or less money in their pockets.
The classic example is demand for new automobiles. Each percentage-point increase in average after-tax income is associated with slightly more than a 2.5 percentage-point increase in automobile sales and a 0.36 percent drop in spending on public transportation, presumably because people are buying cars or driving more, abandoning the bus and subway, Azzam found.
When it comes to food, America's changeable tastes are more surprising. When people have more cash in their pockets, they spend less on cane sugar but more on candy and chocolate. We lose our taste for spaghetti but buy more ice cream. Processed meat sales soar while the market for dried fruits and vegetables dries up. Demand for beer drops but liquor sales soar. People also spend more on manufactured ice when they have more money, as well as on more Scotch that needs to cool.
Some of these patterns are easily explained. As income rises, so does demand for healthy foods and for convenient foods, he says. But, Azzam says, the demand for coffee drops when disposable income is increasing. You'd think that a bit more cash would lead people to splurge on the fancier sorts of java. But that's not what Azzam found. Maybe coffee is comfort food for the financially depressed.
Azzam also found that our tastes for certain kinds of foods change over a lifetime, and income has a role in this, too. "Examples are supermarket label products and one of my favorite products when I was a graduate student: bulk oatmeal," he says, which tends to be popular among the younger, poorer crowd while cereals become the breakfast food of choice when we grow older and wealthier. (Advertising can change these patterns, he says. The current Campbell's soup ad plays on nostalgia with the slogan "The way it used to be" -- a thinly veiled attempt to attract aging Baby Boomers who consider Campbell declasse, Azzam says).
But he found that some foods are virtually impervious to changes in disposable income. Demand for meat remains constant in good times and bad. So does our appetite for cookies and crackers.
"My intuition is that these are class-neutral products," Assam says. "Whether you are rich or poor, we still enjoy our cookies and saltines" -- plus a juicy steak every once in a while.
Locked and Loaded
This is not necessarily a good time to be in Washington. First, the federal government told us that terrorists are more likely to strike now than they were just a few months ago. Then we found out some of the scary things our fellow citizens are doing to prepare themselves for a terrorist strike.
A Washington Post survey of 600 randomly selected area residents found that about two in three said they are stockpiling water, food and batteries or taking precautions like designating a safe room or buying duct tape, just like the government said we should.
But others are taking more drastic measures. "In case of a ground attack, I bought more bullets," says one 21-year-old Maryland man who seems to believe that terrorists march in Infantry-style brigades. "Armed myself," says a 45-year-old Maryland man, clearly a potential foxhole-mate of the first.
"I've sharpened my ax and got my good old muzzle-loading flintlock," says a 76-year-old Washington man, clearly of pioneer stock. "I got extra firearms and they are always loaded," says a 22-year-old Virginia woman whose next investment might be in an NRA gun safety course. Ditto for the 72-year-old Maryland man who says he "cocked my pistol" when the government warning went from yellow to orange.
Others among us are loaded, but in a different way.
"Stocked up on Scotch," says one 54-year-old Maryland man.
Richard Morin is director of polling for the Washington Post.