The Effect of Retail Grocery Coupons for Breakfast Cereals on Household Purchasing Behavior

Transcription

1 The Effect of Retal Grocery Coupons for Breakfast Cereals on Household Purchasng Behavor Joshua Bernng A and Hualu Zheng B A Assstant Professor Department of Agrcultural & Resource Economcs Unversy of Connectcut Emal: oshua.bernng@uconn.edu B Graduate Student Department of Agrcultural & Resource Economcs Unversy of Connectcut Emal: hualu.zheng@uconn.edu Selected Paper prepared for presentaton at the Agrcultural & Appled Economcs Assocaton s 2011 AAEA & NAREA Jont Annual Meetng, Ptsburgh, Pennsylvana, July 24-26, 2011 Copyrght 2011 by Bernng. All rghts reserved. Readers may make verbatm copes of ths document for non-commercal purposes by any means, provded that ths copyrght notce appears on all such copes.

2 The Effect of Retal Grocery Coupons for Breakfast Cereals on Household Purchasng Behavor Gven the vast number of products avalable at grocery stores, s essental that food manufacturers and retal grocery store chans advertse to both retan and attract new customers. Coca-Cola recognzed ths n 1887 when they ntroduced the frst known coupon to market ther new product (Geuss 2010). Coupons became prolfc durng the early part of the 20 th century, especally, durng the Great Depresson when consumers needed any support to survve. Snce that tme, coupons have become ubquous. Whereas coupons were tradonally acqured by way of Sunday newspaper ads, they are now offered va multple sources ncludng daly papers, drect mal, onlne sources and at retal locatons. For a perod of tme n the late 90 s, coupon use had been n declne; however, durng the latest economc recesson, they have seen a dramatc ncrease n use. In 2006, 2.6 bllon coupons were redeemed, reversng a 15 year downward trend (CNN, accessed on February 25, 2011). Whle the maory of research on coupons has examned ther effect on purchases, there are mportant polcy questons related to consumer health to be consdered as well. Because coupons offer a prce dscount, they may encourage consumers to purchase ems they normally would not gven ther budget and preferences. As such, coupons may motvate consumers to purchase more unhealthful products relatve to ther typcal purchases. Alternatvely, coupons mght also encourage consumers to purchase more healthful products. Several authors fnd evdence that coupons do n fact encourage brand swchng (Gupta, 1988; Nesln et al 1985; Bawa and Shoemaker 1987). To date, 1

3 however, there has been no research nvestgatng how coupon-nduced brand swchng or new product purchases mpact the nutronal qualy of household purchases. In ths artcle, we examne the affect of retal and manufacturer coupons on household purchases. Specfcally, we examne the effect that coupons have on the nutronal qualy of purchases made by households, where nutronal qualy s measured n terms of fber, sugar and proten. We focus explcly on breakfast cereals as they are both an mportant contrbutor to healthful dets and are almost exclusvely purchased from grocery stores. We use household level purchase data for three years whch ncludes nformaton on household demographcs and purchases. Usng ths data we have to deal wh (at least) three estmaton ssues. As households do not purchase cereals n every perod, we observe zero purchases for much of the panel. We use fxed effects model to account for zero purchase decsons, assumng that the decson to make purchases s determned by tme nvarant characterstcs. If zero purchases are non-randomly determned for each household, however, fxed effects estmaton wll not be approprate. As such, we use a two-staged model to test for sample selecton as well as account for sample selecton bas. We also face potental bas due to omted varables. That s, unobserved household characterstcs not specfed n our estmaton may be correlated wh the decson to use coupons whch would also lead to based estmaton. To deal wh ths, we estmate household level fxed effects. Fnally, snce the decson to use coupons s endogenous to the purchase behavor of households we use nstrumental varables to deal wh endogeney. 2

4 In both our fxed effects models and our sample selecton models we fnd that coupon usage has a sgnfcant mpact on the nutronal qualy of cereals purchased by households. Specfcally, we fnd that the average sugar content decreases and the fber content ncreases. Ths suggests that coupons have a posve mpact on the nutronal qualy of cereals purchased by households, holdng all other factors constant. In addon, we fnd that there s a tme varant sample selecton ssue whch we control for n our sample selecton model. Gven the prolfc use of coupons by households and the fact that they offer both a prce dscount and an advertsement for products, they mght be an effectve way to help gude consumers to healther food choces. Data In ths artcle, we use household level AC Nelsen data whch ncludes daly household grocery purchases of breakfast cereals by households n the greater New York area from Breakfast cereal s generally purchased only at grocery stores. As such, our data wll not lack a sgnfcant amount of mssng cereal purchased away from home. In addon to household demographcs and purchase characterstcs, the data also ncludes nformaton on household coupon use durng purchase. Ths data ncludes the type of coupon used (retal vs. manufacturer) and the value of the coupon. The AC Nelsen purchase data descrbes product brand name (or prvate label name), flavor characterstcs and UPC. The data does not, however, provde extensve nformaton on product nutronal qualy. We rely on several sources to match products wh ther macronutrent profles (calores, total fat, sodum, fber, sugar and proten). The largest source of data comes from the USDA Agrcultural Research Servce s Natonal 3

5 Nutrent Database (2006, 2007, 2008). Ths data s updated annually and contans the nutrent contents of most maor brands of cereals. We supplement ths data wh the Canadan Nutrent Fle database provded by Health Canada (2010). Much of the Canadan data s derved from the USDA data, but provdes some product nformaton that the USDA does not. We also extract data from Nutrbase 9 Nutron and Fness Software personal addon (purchased at whch provdes smlar detaled nformaton on varous cereal products. For cereals wh no nutron nformaton avalable n these databases, we use onlne search methods to fnd nutron facts panels. The maory of the products have manufacturer webses whch provde ths nformaton. A large number of prvate label cereals also have onlne nutron nformaton avalable through grocery store webses. In cases where we can not fnd prvate label nutron nformaton, we substute brand name equvalent nutron nformaton. For example, for a prvate label product labeled n our data be sze shredded wheat (frosted), we would use Kellogg s brand Be-Sze Frosted Shredded wheat nutron nformaton. Whle ths s not always a perfect substute, prvate label products are often equvalent to ther name brand counterparts n terms of ngredents. There were 15 cereals (four prvate label) for whch we could not fnd nutron nformaton. Three of these cereals were one-tme promotonal cereals (for example Jerome Betts World Champonshp Crunch) and were purchased wh low frequency. The remanng mssng data were low-frequency purchases. The nutron data was all converted nto per gram uns. In the lmed cases where we had two or more sources of varyng nutron nformaton, we took the average of these nutronal values. Whle s possble to lnk the year of the nutron data wh 4

6 the year our products were purchased, we dd not do ths. Based on nteracton wh the USDA, we fnd that the nutron nformaton s not nstantly (or even frequently) updated followng a change n product. As such, any change n cereal over a three year perod may not be reported n our data set. However, cereals that we observe wh changes n ther nutronal profle do not have drastc changes. Importance of Breakfast Cereal In ths artcle, we focus on breakfast cereals for several reasons. For one, cereal s regularly consumed n the US and s a popular choce for breakfast among chldren and adults. Further, breakfast has been shown to be an mportant contrbutor to mental and physcal health. After controllng for demographcs and lfestyle dfferences, Smh (1999) found that those who consumed breakfast cereal every day reported better mental and physcal health than those who consumed nfrequently. Addonally, cereal encourages complementary consumpton of mlk, whch self has mportant health benefs. The type of cereal used n our data set vares largely from all-natural cereals to chldren s cereals as does the nutronal content. As such, s relatve easy to consume both healthful and unhealthful cereals. We present a summary of the nutronal content of the cereal n our data set (Table 1). The average servng sze for our data s 37.9 grams 1. There s a large varaton n the calores per gram wh the max roughly eght tmes as large as the mn. These hgh calores per gram cereals tend to be eher the granola cereals or chldren s cereals that have hgh levels of sugar per servng. Low 1 The Canadan nutronal data provdes ther nutron data n 100g servng sze whch does not reflect the true servng sze. We calculate the average servng sze for those cereals wh actual servng sze measurements. 5

7 calores per gram cereals are basc gran cereals (such as bran) that contan ltle added sugar. As expected, the level of sugar, fber and proten vares que a b between cereals as well wh several cereals havng zero values. As expected, calores correlates hghly wh total fat and sugar content. Fber negatvely correlates wh both sugar and calores, hghlghtng the overall qualy of hgh fber cereals. There s debate regardng the overall nutronal benef of breakfast cereals, partcularly for chldren. Schwartz et al (2008) state that chldren s cereals contan more calores, sugar, and sodum and less fber and proten than non-chldren s cereals. Further, they note that the maory of chldren s cereals fal to meet natonal nutron standards and suggest that recommendatons of ready-to-eat breakfast cereals should consder ther full nutrent profles. In fact, n an experment, Harrs et al (2010) fnd that offerng chldren hgh-sugar cereals leads to them consumng both more total grams and more grams of sugar than chldren offered low-sugar cereal. In addon, chldren offered lowsugar cereal were more lkely to put fru on ther cereal. Alternatvely, research n the nutron lerature suggests that even sugar-sweetened cereals are benefcal to healthful dets as they also provde mportant shortfall mcronutrents such that are often lackng n typcal dets such as calcum, magnesum and potassum as well as a long lst of other nutrents (Ncklas, O Nel and Myers 2004, Morgan, Zabk and Levelle 1981, Frary, Johnson and Wang 2004 ). The USDA data provdes detaled nutronal nformaton for a small selecton of cereals. We compare the nutrents of cereals wh greater than 10 grams of sugar (the average) wh those that have less than 10 grams of sugar (Table 2). In general, the average value for nutrents per gram s hgher for low-sugar cereals than for hgh-sugar 6

8 cereals. The amounts of both vamn A and D, however, are larger on average n the hgh sugar cereals whch s lkely due to cereals beng fortfed wh these vamns. That s, hgh sugar cereals tend to have lower amounts of nutrents wh the excepton of fortfed vamns. We fnd smlar results when we compare cereals that are expected to be targeted at chldren versus other cereals 2. As noted n the nutron lerature, most cereals do n fact delver many mportant vamns; however there s a clear dfference n the amount of sugar provded. Further, hgh sugar cereals tend to provde fewer nutrents on average. The ntenton of ths research s not to evaluate the overall nutronal qualy of breakfast cereals, however, as ths s beyond the scope of tranng and ths paper. We are prmarly nterested n how coupons may mpact the consumpton of mportant nutrents (sugar, fber and proten) acqured through breakfast cereals. Motvaton Coupons play an mportant role n food marketng as they have a dual effect on consumers (Ward and Davs 1978). Frst, coupons nform or remnd consumers about a product, therefore advertsng the product. Then they offer a prce dscount for that product. In ther early paper, Ward and Davs (1978) fnd that even after accountng for consumer hab persstence, coupons have a posve mpact on orange uce purchases. Lee and Brown (1985) fnd smlar results, agan usng orange uce. Dong and Kaser (2005) fnd coupons mpact US cheese purchases and that coupon usage vares across ethnc groups. Fnally, Dong and Lebtag (2010) fnd wh fru and vegetable purchases 2 We categorze cereals as chldren s cereals f they have cartoon depcted characters on ther boxes, have commercals targeted at chldren or have names seemngly ntended to appeal to chldren. 7

9 that prce dscounts usng coupons have more of an effect than ust prce dscounts, provdng support for the dual effect of coupons. In addon, seems evdent that frms would not use coupons unless they were expected to have an mpact on consumers. In fact Nevo and Wolfram (2002) fnd evdence that frms lower prces durng perods of coupon avalably and that coupons nduce repurchase. As noted by Lu and Moorthy (2007), s wdely accepted that coupons are used as a way for frms to prce dscrmnate, suggestng that they do mpact consumer purchase behavor. As coupons appear to have an effect on consumer choces, from a polcy perspectve, an mportant queston s how do coupons affect the qualy of purchases beng made? Currently, there s much research regardng the effect of prces on food choce and the mplcatons for obesy. At queston s whether or not taxes can reduce consumpton of unhealthful foods. Smlarly, there s publc concern regardng the effect of product advertsng (partcularly to chldren) on the purchase of unhealthful foods. Snce coupons combne both prce and advertsng, s mportant to consder ther combned effect on the qualy of purchases made by households. In general, s assumed that low prces or heavy advertsng for unhealthful foods leads to greater consumpton, thereby reducng det qualy. Wh coupons, however, the effect s not as ntuvely clear. Assume that a household buys a vector of consumable goods x, wh = 1 to n elements such that each element n x s household has preferences x ( p w) p xk ( pk, w) pk goods x k wh k=1 to m where at least one element of x. Gven a vector of prces and ncome (w), each,, relatve to some other vector of x s dfferent from x k. Nutronal 8

10 qualy can be measured n many dmensons, but we can focus on a subset of relevant nutrents, n. From the vector of goods chosen, the household receves the nutronal value n ( x ). The nutronal value s not unque to one vector of specfc brands n the market. There are multple vectors of goods that can produce smlar nutronal value. In addon, household preferences are not necessarly nclusve of nutronal value. and k Assume that there s some vector of coupon values c whch affects elements of x such that the preference orderng changes to: x p ( c) ( w) p x p ( c) k ( k w) pk,,. Ths s not an unusual phenomenon as ndvduals have been found to swch brands because of coupons (Gupta 1988). Of nterest n ths artcle s what happens to the nutronal value the household receves after the coupon has been used. In the frst scenaro, we may observe that ( x ) n( ) n = so that there s no change x k n the nutronal value the household receves from ther purchase of x k. In ths case, we would expect the household to be better off but we would not observe any change n the nutronal value receved by the household. In the second scenaro, we may fnd that n( x ) n( )(or alternatvely, ( x ) n( ) x k n ) so that the nutronal value receved from x k the vector of goods has become worse (better) nutronally. In ths case, we would observe some change n the nutronal value of the household for at least one element n n. It s mportant to note that any change n the nutronal value receved by some household, n ( x), could result from dfferent types of behavor. In one nstance, the change from ( ) x n to ( ) n may be for only one element. Ths would lkely correspond x k to there beng only one element n the coupon vector c. Alternatvely, one element n the x 9

11 coupon vector c mght motvate a household to completely change s vector of purchases. Mlkman and Beshears (2009) n fact fnd such behavor wh coupons and refer to ths as a wndfall effect. Specfcally, they fnd that households who receve a coupon of value $c often spend $ c + ε extra on ther total basket of goods where ε > 0. As such, coupons may alter sngle purchases of goods or may alter entre baskets of purchases. Ultmately, the effect on the nutronal qualy depends on the entre vector of purchases, whch s an emprcal queston. To ths end, we specfy several emprcal models to estmate ths effect. Emprcal approach To study the effect of household coupon use on the nutronal qualy of cereal purchases made my households, we specfy the followng model: NQ = β coupon + γ prce + µ + ε (1) where NQ s the nutronal qualy of the cereal beng purchased (measured as sugar, fber or proten) by household at tme t, coupon s the value of any coupon redeemed by the household at tme of purchase, and prce s the prce of the cereal.ε s the dosyncratc error term and µ s a household level fxed effect. Households n our data make nfrequent purchases of cereal. Addonally, they often purchase several cereals per shoppng trp. As such, we aggregate purchases to a monthly level and calculate NQ, coupon, and prce as weghted averages for each of the values. Even wh aggregaton, we stll observe zero purchases for months n our data set. There are numerous ways to nterpret the zero purchase data. At a basc level, we can consder these zeros to be the result of a selecton process. Borrowng from Vella (1998), we have the followng specfcaton: 10

12 NQ * = β coupon + γ prce + µ + ε (2) * d = δ z + α + v (3) * = > d 1 f d 0 (4) NQ = NQ * d. (5) In equaton (2), We only observe * NQ and * d are latent varables wh observed counterparts NQ and d. NQ f d s equal to one whch only occurs f * d s greater than some threshold, n ths case zero. In the case of our analyss, we have two stages to consder: the decson to make grocery store purchases and then the nutronal qualy of the purchases. We only observe NQ f households decde to make grocery store purchases. Ths process s determned by ndvdual characterstcs z, ndvdual fxed effects α and an dosyncratc error v. Whout correctng for ths decson process, estmaton on equaton (2) usng OLS wll produce based estmates. It mght be the case that certan types of households have specfc, tme-nvarant shoppng habs. If sample selecton s due only to tme-nvarant characterstcs of the ndvdual, whch may be observed or unobserved, then a fxed effects estmator s consstent and controls for sample selecton. (Cameron and Trved 2005). Nman and Verbeek (1992) and Verbeek (1990) consder the applcably of fxed effects methods. By transformng the data, genercally represented as x, to s devaton from the means where we have s observatons for household over some panel T we have: x D = x T s= 1 x s d s T s= 1 d s E e D x, d =. As long as [ ] 0, an unbalanced panel can be consstently estmated as: 11

13 1 N T N T D D D D β FE = x x x NQ d. (6) = 1 = 1 = 1 = 1 Put smply, as along as the selecton process descrbed above operates purely through the ndvdual specfc term α, no bas wll exst. Whle equaton (6) provdes a smple method to estmate equaton (1), the selecton process may be tme varyng whn households. Woolrdge (1995) provdes a method to both test for selecton bas and adust equaton (1) for such potental bas. Under hs approach, Woolrdge assumes that the error term ε s mean ndependent of all parameters n equatons (2) and (3) condonal on the scaled error n equaton (3), ρ v, E e µ, α, z, d, v = ρv where v does not nclude current perod t. Under such that [ ] ths assumpton, equaton (2) can be wrten as: NQ = β coupon + γ prce + µ + ρv. (7) To estmate equaton (7) Woolrdge follows Chamberlan (1980) and defnes α = η0 + θ1z +... δ z + c, where c s assumed to be ontly dstrbuted wh v. 1 T T Insertng ths nto the selecton equaton (3) produces: * d = δ z + θ z +... δ z + h 1 1 T T (8) where h + = c v and h are ndependent of z. Equaton (7) s then wrten as: NQ = β coupon = β coupon + γ prce + γ prce + µ + + ρ( h c ) ( µ ρc ) + ρh (9) The test for and estmaton of bas now occurs through the term ρ. Vella (1998) outlnes the steps to estmate equaton (9). In the frst step, we estmate a cross sectonal prob of the selecton varable d on the explanatory varables z for each tme perod and 12

14 calculate an nverse Mlls rato λˆ. In the second step, we estmate an unbalance fxed effects panel correspondng to d =1 wh the nserted rato: NQ = β coupon + γ prce + ζ + ρλˆ + η (10) wh ζ = µ ρc. Sample selecton s then tested usng a t-test on ρ. Fnally, the decson to use coupons s clearly endogenous to the choce of nutronal qualy that s purchased. To control for endogeney we use data on coupon usage n other markets as nstrumental varables. Specfcally, n a frst stage equaton, we estmate coupon usage as a functon of aggregate coupon usage n other markets. Smlar to the Hausman and Leonard (2002) approach to deal wh prce endogeney, we assume that coupon use n other markets wll be a functon of the same factors that affect the overall supply of coupons. These factors are lkely to affect the avalably, and therefore use of coupons n our study market, but not the purchase of cereal by households whn our market. In ths framework, we are omtng the nal decson households make to acqure coupons. For one, we have nadequate data regardng the number of coupons a coupon has (versus ther use) and the supply of coupons by manufacturers and retalers. Results We estmate equaton (1) followng two procedures. In the frst, (referred to as the fxed effects model) we use nstrumental varables to account for endogenous coupon use and estmate our model usng the dfference from the mean as shown by equaton (6). In the second procedure, (referred to as the sample selecton model) we frst estmate the sample selecton process usng a prob model, calculate the nverse mlls rato for each crosssecton n the panel and estmate a fxed effects unbalanced panel usng equaton (10). 13

15 We estmate robust standard errors for the fxed effects model and clustered standard errors by households for the sample selecton model. We estmate the fxed effects model usng three dfferent dependent varables: sugar (g) per servng, fber (g) per servng, and proten (g) per servng (Table 3). We fnd that the amount of sugar n the cereals purchased by households goes down sgnfcantly as households use more coupons to make purchases. At the same tme, we fnd that the amount of fber n the cereals purchased ncreases sgnfcantly, whereas the amount of proten remans unchanged. Taken together, ths suggests that the use of coupons by households n our study leads to the purchase of cereals wh hgher nutronal qualy (n terms of sugar and fber). A possble explanaton for ths s that hgher qualy cereals also tend to be hgher n prce per gram, especally those that are hgh n fber. As such, households may tend to purchase these cereals when they have a prce reducton such as that provded by a coupon. Holdng all else constant, we mght nterpret ths as a posve mpact of coupons. Clearly, we do not know how household behavor changes for other products. There appears to be some seasonal varaton wh cereal purchases as well. The amount of sugar purchased ncreases durng the summer and the amount of fber decreases. Ths s consstent wh the fact that chldren are home more durng the summer months and are lkely to consume more cereal products. As chldren s cereal tends to be hgher n sugar and often lower n fber, we would expect greater amounts of sugar and lesser amount of fber purchased. As prevously dscussed, the factors that affect the sample selecton process (to shop or not) may be tme varant whn households. As such, the fxed effects estmaton 14

16 wll be based. We therefore estmate the sample selecton model over the same dependent varables. In the frst stage prob (not presented here) we estmate the decson to make a purchase or not as a functon of ncome, number of chldren, number of teens, race ndcators and an ndcator for Hspanc households. From ths, we calculate the nverse Mlls rato to nclude n our estmaton. The results of the sample selecton model (Table 4) are smlar for the sugar model, ndcatng that coupons do have a negatve effect on the sugar content purchased. The effect on fber s no longer sgnfcant, but the sgn s smlar as the fxed effects model. Importantly, we fnd that there does appear to be sample selecton bas n the sugar and proten models, as dentfed by the sgnfcant nverse Mlls rato. As such, appears that the decson to shop or not s tme varant and the fxed effects model does not adequately account for such bas. We also evaluate the frst stage nstrumental varable estmates for each one of our models. We calculate Hansen s J test for overdentfcaton and fal to reect the null hypothess whch suggests that our nstruments are satsfactory. Our frst stage estmates all have F-values greater than 10 a rule of thumb for weak nstruments. Further analyss of the strength of our nstrumental varables s requred n the future. Conclusons The use of coupons has ncreased greatly over recent years, partcularly durng the latest economc recesson. Coupons play an mportant role n the retal envronment as they have become wdely accessble through many dfferent sources. Whle there s evdence that coupons affect product choce, there has been no research to date on how coupons affect the qualy of the choces made, whch has mportant mplcatons. Our prelmnary 15

17 results suggest that coupons do have an mpact on the nutronal qualy of breakfast cereals purchased by households. Gven our results, an mportant queston s what ths means for food marketng polcy as pertans to helpng consumers. As healthful cereals are often more expensve, they may prohb some consumers from purchasng them. Coupons not only offer a prce dscount, but also an advertsement for a specfc product. Promotng healthful foods usng coupons may be an effectve way, therefore, to motvate consumers to make better choces. It may be worth developng ways to ncentvze frms or retalers to provde more coupons for healthful products and to avod coupons for less healthful products. 16

18 References Bawa, K., and R. Shoemaker The Effects of a Drect Mal Coupon on Brand Choce Behavor, Journal of Marketng Research (24): A. Coln Cameron and Pravn K. Trved. Mcroeconometrcs: Methods and Applcatons. New York: Cambrdge Unversy Press, Chamberlan, G Analyss of Covarance wh Qualatve Data. Revew of Economc Studes 47(1): CNN. Economc shock gves rse to coupon cuttng. Last Modfed October 09, Connectcut Department of Publc Health Healthy Eatng and Actve Lvng: Connectcut s Plan for Health Promoton. Dong, D., and H.M. Kaser Coupon Redempton and Its Effect on Household Cheese Purchases, Amercan Journal of Agrcultural Economcs 87(3): Dong, D., and E. Lebtag Promotng Fru and Vegetable Consumpton: Are Coupons More Effectve Than Pure Prce Dscounts? Economc Research Report No. 96, U.S. Dept. of Agrculture, Economc Research Servce (June). Frary C.D., R.K. Johnson and M.Q. Wang Chldren and adolescents choces of foods and beverages hgh n added sugars are assocated wh ntakes of key nutrents and food groups. Journal of Adolescent Health, 34: Geuss, Megan Coca-Cola and the Brth of the Coupon. Wred (November). Gupta, S Impact of Sales Promoton on When, What and How Much to Buy, Journal of Marketng Research (25):

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20 Ncklas T.A., C. O Nel and L. Myers The mportance of breakfast consumpton to nutron of chldren, adolescents, and young adults. Nutron Today, 39: Nman, T. and M.Verbeek Nonresponse n Panel Data: The Impact on Estmates of the Lfe Cycle Consumpton Functon. Journal of Appled Econometrcs, 7(3): Schwartz M.B., L.R.Vartanan, C.M.Wharton and K.D.Brownell Examnng the Nutronal Qualy of Breakfast Cereals Marketed to Chldren. Journal of the Amercan Detetc Assocaton. 108: Smh, A.P Breakfast Cereal Consumpton and Subectve Reports of Health. Internatonal Journal of Food Scences and Nutron, 50: U.S. Department of Agrculture, Agrcultural Research Servce USDA Natonal Nutrent Database for Standard Reference, Release 19. Nutrent Data Laboratory Home Page, U.S. Department of Agrculture, Agrcultural Research Servce USDA Natonal Nutrent Database for Standard Reference, Release 20. Nutrent Data Laboratory Home Page, U.S. Department of Agrculture, Agrcultural Research Servce USDA Natonal Nutrent Database for Standard Reference, Release 21. Nutrent Data Laboratory Home Page, Vella, F Estmatng Models wh Sample Selecton Bas: A Survey. The Journal of Human Resources. 33(1):

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22 Tables Table 1. Nutronal content of breakfast cereal n sample per gram Varable N Mean Std. Dev. Mn Max Servng Sze (g) Calores Total Fat Sodum Fber Sugar Proten correlaton Calores Total Fat Sodum Fber Sugar Total Fat Sodum Fber Sugar Proten Table 2. Mcro nutrent characterstcs of sub-sample of cereals sugar > 10 g, 95 obs sugar <= 10 g, 79 obs Varable Mean Std. Dev. Mn Max Mean Std. Dev. Mn Max calcum ron magnesum potassum znc copper vamn A vamn D vamn C thamn rboflavn nacn vamn B vamn B folc acd

23 Table 3. Fxed effects model results varables sugar fber proten coupon *** 6.216* seasonal ** ** prce ** Constant * * Observatons 23,887 23,887 23,887 Standard errors provded below estmates *** p<0.01, ** p<0.05, * p<0.1 Table 4. Sample selecton model results varables sugar fber proten coupon * seasonal *** prce mr ** ** Observatons 23,887 23,887 23,887 Household FE's Standard errors provded below estmates *** p<0.01, ** p<0.05, * p<0.1 22