January 2010 An analysis of the relationship between the price of and demand for school lunches
Parents often report that price is a key consideration in their decision to buy a school meal for their child. The School Food Trust recently commissioned London Economics to explore just how important this is, with an analysis of the relationship between the price of and demand for school lunches. Their findings are now available to download in full below, but include:
- Demand for school food is more sensitive to changes in price than other food products. Estimates of the elasticity of demand for food products range between -0.25 to -0.75 with food consumed away from home approximately –0.70 (this means a 10% increase in price will result in a reduction in demand of between 2.5% and 7.5% or 7% respectively) . For school meals, the elasticity of demand is between –0.70 and –1.00 (this means that for a 10% increase in price we would expect to see a fall in take up of between 7% and 10%).
- Since 2005, there has been a decline and partial recovery in the take-up of school food, alongside increases in the prices charged. The decline in meal take up numbers, which would be expected to accompany such price rises, has not followed the anticipated trajectory. This success against the expected trend appears to be a result of increased FSM registration and consumption, alongside concerted efforts to increase the quality and appeal of school meals. However, negating these factors, price increases of any description will be associated with reduced numbers of pupils paying for school meals, holding other factors constant.
- The analysis undertaken indicates that there is little difference in the economic cost (ingredients and labour) of producing a packed lunch compared to purchasing a school meal – nor has school meal inflation exceeded general inflation over the period of the analysis.
The full report can be downloaded below.
