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Restaurant Demand in the 

CE Diary Survey

Taylor J. Wilson

Economist

Division of Consumer Expenditure Surveys

American Council on Consumer Interests

22 April 2017
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Introduction

1. Background and Literature

2. Measuring Restaurant Dining

3. Demand as a Function of Income

4. Results and Conclusions
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Background and Literature

 “The Myth That Links Poor Families to Fast Food”

- The Atlantic, Sept 2015

 “Is it Really Just the Poor Who Eat Fast Food? The 

Impact of Income and Wealth on U.S. Consumption”

- Zagorsky (2014) Ohio State University

 “National Health and Nutrition Examination Survey”

- Centers for Disease Control and Prevention
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Measuring Restaurant Dining

 Consumer Expenditure Diary 

Survey 

Full Service

Fast Food

Vending Machines

Cafeterias

 Full Service and Fast Food 

account for the vast majority 

of restaurant expenditures.
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Measuring Restaurant Dining

 Data Limitations

No quality measure in CE

Measures are broadly defined

Quantities are not captured

 Quality (signaled by higher prices) can help explain 

expenditure trends by income quintile. 

 Income data are for wealth levels allowing a more 

consistent expenditure pattern to be observed in 

households. 
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Demand as a Function of Income

 Income elasticity of demand for restaurants

%Δ in income compared to % Δ in consumption

– Proportional increases (Unity)

– Greater than proportional increases (Luxuries)

– Less than proportional increases (Necessities)

X is expenditure, I is income, Q is quintile, and C is the vector of observable 

characteristics.

X

(λ) = β0 + β1I(θ) + β2−5 

i=1

4

I

(θ)

∗ Qi + βnCn

ξ =

∂X

∂I

I

X

= β1

if λ and θ are log transformations1
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Results and Conclusions

Restaurant Type Q1 Q2 Q3 Q4 Q5

Fast

Full

• Fast food always has a less than proportional increase. But has 

an consumption uptake across the first three quintiles and 

diminishes again. 

• Full service has a “faster” consumption uptake in the first three 

quintiles and readjusts to a lower elasticity in the higher income 

quintiles. 
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Results and Conclusions

 CE data largely confirms the CDC report and most of 

the existing literature. 

 Fast food is purchased across the board by all levels 

of income as a normal good. 

 Proportion of fast food purchased as a percentage of 

total restaurant spending decreases across quintile. 

 Proportion of full service purchased as a percentage 

of total restaurant spending increases across quintile. 

 Demand has the largest increase for full service 

restaurants at middle income households. 
Contact Information

15 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Taylor J. Wilson

Economist

Division of Consumer Expenditure Surveys

www.bls.gov/cex

202-691-6550

wilson.taylor@bls.gov