Quality Variation and Quantity Aggregation in Consumer Demand for Food

Viewing the problem of “quality” variation in consumer demand for food asa problem of valid aggregation over goods leads to new insights. The simple sum of physical quantities, used as the measure of demand in the “quality” literature, is found to be a theoretically arbitrary and potentially misleading measure of demand when goods are heterogenous. Alternative measures of demand derived from restrictions on quality variation, consumer preferences, or relative prices, are investigated. A hypothetical example illustrates the use of a Hicksian composite commodity assumption. The empirical as well as conceptual merits of the various measures are discussed.