Cheng, Guo (2019-08). The Peanuts and Tree Nuts Market in the United States: Demand Analysis, Variety Seeking, Household Choices, and Consumer Profiling. Doctoral Dissertation. Thesis uri icon

abstract

  • Nuts industry is a critical component of the U.S. agricultural economy. Given the health benefits, peanuts and tree nuts are purchased by consumers on a daily basis in the United States. Our study pertains to eight types of nuts products, peanuts, pecans, almonds, cashews, walnuts, macadamia nuts, pistachios, and mixed nuts. First, we looked at the market level demand for these products using demand system model by giving attention to price and expenditure elasticities. Meanwhile, mixed nut is a unique category that enables us to test consumer's variety-seeking behavior, empirically. Pre-commitment levels are also included to examine the level of consumption of nuts by U.S. households regardless of price and income. Second, we examined the household-level choices of respective nuts using pooled probit model and profiled U.S. nuts consumers using socio-demographic factors. Age of household head, education, presence of children, race, and ethnicity were found to be driving forces of household-level demand for various nuts. We provided insight for stakeholders in terms of market segmentation strategy, targeting consumers. Third, due to the data-censoring issues resting in our dataset, a dynamic unobserved effects Tobit panel was used to estimate the demand for various nuts, to investigate the effects of socio-demographic factors, to address sample selection bias, and to control for unobserved heterogeneity. The main findings speak to the nuts market in terms of pricing strategies, packaging strategies, and market segmentation. Most peanuts and tree nuts were estimated to be inelastic demand, in which increasing price would be appropriate for purveyors and producers to generate more revenues. Peanuts should be packaged and mixed with other products in order to meet consumers' variety-seeking behaviors and almonds are better to be sold individually. Meanwhile, these companies are advised to target households with older head, higher educations, more members, larger income level, and without children. In detailed category, the producers of walnuts and cashews is better to spend efforts on targeting households locating in central area while macadamia nuts have a better market in Pacific area. As such, we provide more up-to-date and thorough analysis of the demand for peanuts and tree nuts, presently lacking in the extant literature.

publication date

  • August 2019