Health information and consumer types in the domestic cracker market

This dissertation comprises an investigation of health information and market segmentation in the United States cracker market. Existing literature largely includes studies of health information and its impact on various food products in which the products of study are specifically addressed in that information. General health information may affect a series of products, not all of which may be addressed in the health information, crackers being an example of such a product. While crackers themselves have not been directly associated with a health scare, many crackers nonetheless contained various ingredients associated with heart problems.;In the first portion of the dissertation, a response function to heart health information is derived for fifty United States metropolitan areas. There is an increase in quantity demanded in response to information in all significant lagged periods. Consumers are expected to realign their consumption choices in response to changes in information, with crackers being only one such product. The goal of this realignment is to be at least as well-off as before the information change. Responses to general health information that may affect a series of products not mentioned in that information are difficult to predict in magnitude and direction. The quantity demanded of some foods containing health-problem-causing ingredients may increase as part of this realignment.;In the second portion of the dissertation, an alternative approach to expressing a demand model or system is proposed. This theoretical approach, known as Wave Function Probabilistic Demand (WFPD), accounts for this probabilistic nature of consumer choice and permits for the complete separation of a market into different types of utility-maximizing consumers.;WFPD is applied to the domestic cracker market using metropolitan area representative consumers as the "individuals" of the market. The market is separated using wave functions into two Types, and one demand system is estimated for each Type. The price and expenditure coefficients for each Type's demand function are statistically different from those of the other Type and of the aggregated market. The elasticities obtained from the WFPD approach assist firms in targeting their marketing and pricing strategies by Consumer Type.;KEYWORDS: Food Health Information, Market Segmentation, Consumer Response Function, Marginal Value of Consumption, Autoregressive Model.