<blockquote>
  <p>Reducing food wastage should in theory reduce demand for food</p>
</blockquote>

<p>Let's examine this claim in a simple static framework. Assume preferences over two goods like</p>

<p><span class="math-container">$$U(x_1,x_2) = a\ln x_1 + (1-a)\ln x_2  \tag{1}$$</span></p>

<p>where <span class="math-container">$x_1$</span> is food and subject to waste, while <span class="math-container">$x_2$</span> is not subject to waste. Now, the quantity in the utility function is not the quantity purchased but the quantity actually consumed. Waste appears in the budget constraint as, say, a mark up in the quantity that is desired to be consumed,</p>

<p><span class="math-container">$$p_1\cdot(1+d)x_1^c + p_2x_2 = I, \;\;\;d\geq 0$$</span></p>

<p>In order for the consumer to consume <span class="math-container">$x_1^c$</span>, it must purchase <span class="math-container">$x_1^d=(1+d)x_1^c$</span> quantity due to waste.</p>

<p>The Lagrangean here is </p>

<p><span class="math-container">$$\Lambda = a\ln x_1^c + (1-a)\ln x_2 + \lambda \Big[I-p_1\cdot(1+d)x_1^c - p_2x_2\Big]$$</span></p>

<p>The first order condtions are</p>

<p><span class="math-container">$$\frac a {x_1^c} = \lambda p_1(1+d),\;\;\; \frac {1-a} {x_2} = \lambda p_2$$</span></p>

<p>From which we obtain <span class="math-container">$\lambda = 1/I$</span> and so the demand function for food</p>

<p><span class="math-container">$$x_1^c(1+d) = \frac a {p_1}I$$</span></p>

<p>Note carefully that "desired quantity to be consumed" is <em>not</em> determined independently from the waste factor.</p>

<p>Summing over all <span class="math-container">$N$</span> identical consumers,</p>

<p><span class="math-container">$$X_1^d = X_1^c (1+d) = N\cdot \frac a {p_1} I$$</span></p>

<p>It is the right-hand-side that expresses the market demand curve in a price-quantity graph -and in it, food waste does not appear. </p>

<p>Assume that  the waste factor is reduced to <span class="math-container">$d' &lt; d$</span>, without this affecting the supply curve. It follows that the demand curve will not be affected either, and so neither the equilibrium price: what will happen is that consumers will continue to demand/purchase the same quantity, <em>but they will now consume more of the good</em>, since waste has somehow been reduced.  </p>

<p>We see that the OP's argument that reduction in food waste will lead to a shift in the demand curve, rests on a crucial and implicit assumption: that the amount consumed given current waste, <em>is a point of satiation</em>, namely that consumers consume "all they want" irrespective of prices and income, and so if waste is reduced, they will not want to increase their actual consumption, and so they will demand/purchase less since the dead-burden of waste has been reduced.  </p>

<p>For people that do not go hungry, there may indeed be the impression that they actually consume at their point of satiation. But this is not at all certain.  </p>

<p>Sometime back, I remember reading about a new coating material that could reduce all friction from glass or plastic. One possible consequence? Bottles of sauce (like tomato ketchup, mayonnaise etc) if coated with this material, would totally and easily empty down to the very last drop. Are we sure that this would mean that the consumers would end up buying less bottles because each bottle would now "last longer"? Or they would end up eating a little more sauce per meal? </p>

CC BY-SA 4.0
2019-01-28T12:04:41.073Z
Isn't this just one of various ways in which consumer behaviour in respect of food and food waste might be modelled?  For example, it seems reasonable to assume that some consumers gain utility from having a wide choice of food available in their home, so buy more than they need, some of which is wasted but has nevertheless contributed to utility.
Adam Bailey
CC BY-SA 4.0
2019-01-28T15:41:13.377Z
@AdamBailey This is indeed a plausible argument. The issue is that in this case we equate a priori "consumption" with "purchase", and therefore we would not be able to theoretically model what the OP is after.
Alecos Papadopoulos
CC BY-SA 4.0
2019-01-27T16:57:44.837Z
2019-01-27T17:15:30.727Z
2019-01-27T17:15:30.727Z
Alecos Papadopoulos
<p>Reducing food wastage should in theory reduce demand for food, thereby driving food prices down. However, there are a lot more factors involved here (for example, the reduction in price of a product x due to lesser wastage in region A may not actually lead to lesser prices in region B because transportation costs may fully offset the price decrease). </p>

<p>Has there been a study that quantitatively links food wastage and food prices?</p>

CC BY-SA 3.0
2017-12-20T12:03:59.360Z
Estimating the relation between food wastage and food prices would require a reliable measure of food waste, and that seems not to be straightforward.  See for example https://academic.oup.com/ajae/article-abstract/99/5/1148/3868245?redirectedFrom=fulltext
Adam Bailey
CC BY-SA 4.0
2019-01-27T18:37:39.567Z
There is a flaw in your introductory statement. "Reducing food wastage should in theory reduce demand for food"  That is not true.  The demand curve for food is the horizontal sum of the marginal utilities.  Reducing waste may increase the supply of food, but the demand depends upon your desire to eat.  Waste is a supply-side effect, not a demand-side effect.
Dave Harris
<agriculture>
Is there a proven, quantitative link between food wastage and food prices?
WorldGov
# Is there a proven, quantitative link between food wastage and food prices?

(Asked by: username_0 on 2017-12-19)

Reducing food wastage should in theory reduce demand for food, thereby driving food prices down. However, there are a lot more factors involved here (for example, the reduction in price of a product x due to lesser wastage in region A may not actually lead to lesser prices in region B because transportation costs may fully offset the price decrease).

Has there been a study that quantitatively links food wastage and food prices?

**Tags:** agriculture
> **Comments:**
> **username_1**: Estimating the relation between food wastage and food prices would require a reliable measure of food waste, and that seems not to be straightforward.  See for example https://academic.oup.com/ajae/article-abstract/99/5/1148/3868245?redirectedFrom=fulltext  
> **username_2**: There is a flaw in your introductory statement. "Reducing food wastage should in theory reduce demand for food"  That is not true.  The demand curve for food is the horizontal sum of the marginal utilities.  Reducing waste may increase the supply of food, but the demand depends upon your desire to eat.  Waste is a supply-side effect, not a demand-side effect.  

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## 1 answers

### Answer by username_3 on 2019-01-27. Score: 1

> Reducing food wastage should in theory reduce demand for food

Let's examine this claim in a simple static framework. Assume preferences over two goods like

$$U(x\_1,x\_2) = a\ln x\_1 + (1-a)\ln x\_2 \tag{1}$$

where $x\_1$ is food and subject to waste, while $x\_2$ is not subject to waste. Now, the quantity in the utility function is not the quantity purchased but the quantity actually consumed. Waste appears in the budget constraint as, say, a mark up in the quantity that is desired to be consumed,

$$p\_1\cdot(1+d)x\_1^c + p\_2x\_2 = I, \;\;\;d\geq 0$$

In order for the consumer to consume $x\_1^c$, it must purchase $x\_1^d=(1+d)x\_1^c$ quantity due to waste.

The Lagrangean here is

$$\Lambda = a\ln x\_1^c + (1-a)\ln x\_2 + \lambda \Big[I-p\_1\cdot(1+d)x\_1^c - p\_2x\_2\Big]$$

The first order condtions are

$$\frac a {x\_1^c} = \lambda p\_1(1+d),\;\;\; \frac {1-a} {x\_2} = \lambda p\_2$$

From which we obtain $\lambda = 1/I$ and so the demand function for food

$$x\_1^c(1+d) = \frac a {p\_1}I$$

Note carefully that "desired quantity to be consumed" is *not* determined independently from the waste factor.

Summing over all $N$ identical consumers,

$$X\_1^d = X\_1^c (1+d) = N\cdot \frac a {p\_1} I$$

It is the right-hand-side that expresses the market demand curve in a price-quantity graph -and in it, food waste does not appear.

Assume that the waste factor is reduced to $d' < d$, without this affecting the supply curve. It follows that the demand curve will not be affected either, and so neither the equilibrium price: what will happen is that consumers will continue to demand/purchase the same quantity, *but they will now consume more of the good*, since waste has somehow been reduced.

We see that the OP's argument that reduction in food waste will lead to a shift in the demand curve, rests on a crucial and implicit assumption: that the amount consumed given current waste, *is a point of satiation*, namely that consumers consume "all they want" irrespective of prices and income, and so if waste is reduced, they will not want to increase their actual consumption, and so they will demand/purchase less since the dead-burden of waste has been reduced.

For people that do not go hungry, there may indeed be the impression that they actually consume at their point of satiation. But this is not at all certain.

Sometime back, I remember reading about a new coating material that could reduce all friction from glass or plastic. One possible consequence? Bottles of sauce (like tomato ketchup, mayonnaise etc) if coated with this material, would totally and easily empty down to the very last drop. Are we sure that this would mean that the consumers would end up buying less bottles because each bottle would now "last longer"? Or they would end up eating a little more sauce per meal?

> **Comments:**
> **username_1**: Isn't this just one of various ways in which consumer behaviour in respect of food and food waste might be modelled?  For example, it seems reasonable to assume that some consumers gain utility from having a wide choice of food available in their home, so buy more than they need, some of which is wasted but has nevertheless contributed to utility.  
> **username_3**: @AdamBailey This is indeed a plausible argument. The issue is that in this case we equate a priori "consumption" with "purchase", and therefore we would not be able to theoretically model what the OP is after.  

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