Impact of Increased Grocery Prices on Households : Studying Sweden 2022/2023

Abstract: In 2022, food prices increased rapidly, prompting this investigation into how the price shock has impacted consumer behavior. Previous studies have found that price shocks affect low- income households with children the most. A switch to more calorie-dense food and a decreased consumption of snacks. This study aims to estimate the price elasticity of various food products and to identify how the elasticities differ among various types of households. The elasticities are calculated using OLS regression on receipt data from Coop. Results show that household variables, including income level, presence of children, shopping location, and organic product preferences, significantly impact the price elasticity of food products. Low-income households without children, living outside major cities and their suburbs, have a higher price elasticity, meaning these shoppers are more sensitive to price changes. The same tendencies were observed for all products even though the exact parameters could only be proven for a third of the products. The findings have important implications for understanding how price changes affect consumer behavior and can inform food policy decisions.