Ice cream has been manufactured commercially in
the United States since the middle of the 19th century.
Ice cream and frozen dessert products comprise an important
and relatively stable component of the United
States dairy industry. As with many other dairy products,
ice cream is differentiated in several dimensions. A
censored translog demand system model was employed
to analyze purchases of 3 ice cream product categories.
The objective of this study was to determine the effect
that changes in retail prices and consumer income have
on at-home ice cream consumption. The analysis was
based on Nielsen 2005 home scan retail data and used
marital status, age, race, education, female employment
status, and location in the estimations of aggregate demand
elasticities. Results revealed that price and consumer
income were the main determinants of demand
for ice cream products. Calculated own-price elasticities
indicated relatively elastic responses by consumers for
all categories except for compensated bulk ice cream.
All expenditure elasticities were inelastic except for
bulk ice cream, and most of the ice cream categories
were substitutes. Ongoing efforts to examine consumer
demand for these products will assist milk producers,
dairy processors and manufacturers, and dairy marketers
as they face changing consumer responses to food
and diet issues.