The Effect of Sell-by Dates on Purchase Volume and Food Waste
30 Pages Posted: 19 Dec 2018
Date Written: November 30, 2018
In September 2010, New York City repealed its regulation on sell-by dates of pasteurized milk products, in an effort to extend shelf life and reduce unnecessary disposal. This paper examines whether the city’s new policy effectively reduces food waste and improves welfare. We find that the policy reduces purchase volume by about 10%. A partial equilibrium analysis reveals that while observed quantity declines, the actual consumption of milk increases, implying a reduction in food waste more than 10%. Furthermore, we theoretically prove this consumer welfare-improving pattern is generalizable to all types of perishable food with inelastic demand. By treating food waste as a tax, we show that, regardless of demand elasticities, the net change in consumer and producer welfare is positive and the excess burden is lower.
Keywords: Sell-by Dates, Food Waste, Milk Consumption
JEL Classification: D12, M38, Q18
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