Demand for Prepared Meals by U.S. Households

Using the 1987–88 NFCS, a Heckman two‐stage procedure was used to estimate the demand for prepared meals by U.S. households. Prepared meals were defined as those ready to eat and those ready to cook. Households headed by younger, more educated, and time‐constrained managers were more likely to purchase prepared meals. Income elasticities ranged from 0.07 to 0.13, while own‐price elasticities ranged from −0.23 to −0.66. Evidence exists to indicate that prepared meals and food‐away‐from‐home are substitutes. The presence of teenagers in a household is positively associated with expenditures of prepared meals.