NIFK14027U CANCELLED: Consumer Economics and Food Policy

Volume 2017/2018

MSc Programme in Food Science and Technology


The aim of the course is to give an understanding of economic incentives and rationales in the area of food consumption, production and policy on the basis of microeconomic theory. This enables the student to give a theoretically founded answer to questions like: How is  the price of organic apples affected if major levels of pesticide residues suddenly are found in conventional apples? Why may a traffic light food label not be able to reduce obesity? Is monopoly in the soft drink industry ever beneficial for the consumers? Why do Danish municipalities request more than one supplier of meal service to the elderly? In addition, aims and arguments for regulation in relation to public food policy will be covered.

The course consists of three main parts:

1. The economic part.
This part of the course focuses on consumer and producer behavior in relation to consumption and production of food. The underlying assumptions about the consumers’ decision making are discussed, including the concepts of utility maximization, demand functions, prices and income. The firms’ production decisions are also addressed and concepts such as profit maximization and the equimarginal principle are introduced. In order to obtain a comprehensive picture of how different markets work we use real world examples throughout the course to discuss consumer and producer choices at markets characterized by perfect competition, monopoly or oligopoly. Relevant cases concerning topics as food safety, obesity, organic food, animal welfare will thereby be discussed. 

2. The policy part.

The welfare economic rationale for policy regulation is discussed and some of the mostly used policy instruments are examined. Changes in prices through taxes or subsidies are examples of such instruments to change consumers’ dietary habits, where e.g. tax on sugar and fat may induce people to eat less unhealthy products. Information is another type of policy instrument which may affect the behavior of consumers, such as whole grain labels or campaigns about the health benefit of eating fruits and vegetables. Other instruments such as direct regulation, public support and public control will also be discussed. Relevant cases will be used to discuss the optimal choice of policy instrument.

3. Term paper.

The course includes a term paper on a predefined topic addressing a current societal challenge within the food area. The term paper gives the students an excellent opportunity to apply the theory on a relevant topic and thereby get a deeper understanding of the curriculum.

Learning Outcome

The aim of the course is to give the students a basic understanding of economic thinking in relation to decision making in the food area. In addition, the course provides an overview of economic policy instruments that can be used to affect the market.

After completing the course the students should be able to:

Describe the mechanisms behind demand and supply of goods.
Describe the effects of different policy instruments aimed at affecting the demand and supply of goods.
Reflect about the welfare and distributional effects from different policy instruments.
Define central concepts within the area of microeconomics and consumer behaviour.

Apply microeconomic theory to analyse elementary economic problems in the food area.
Communicate and discuss concrete economic problems and solutions with different target groups.

Cooperate with fellow students in analysing and solving different economic problems in a broader perspective and also in relation to public food policy.
Independently work with economic problems related to the food market.

Text book supplemented with relevant articles

Steven E, Landsburg (2008), Price Theory and Applications, 7e, Thomson South-Western.

The course cannot be attended by students from Jordbrugsøkonomi/​Agricultural Economics - ENRE, Naturressourcer med fagpakke i miljøøkonomi
Central parts of the curriculum will be presented through traditional lectures. This knowledge will be elaborated on in theoretical exercises. The students will in groups work with different case studies. An individual project report on a specific theme has to be submitted as a requirement for the 4-hour written exam.
  • Category
  • Hours
  • Exam
  • 4
  • Lectures
  • 42
  • Preparation
  • 100
  • Project work
  • 40
  • Theory exercises
  • 20
  • Total
  • 206
7,5 ECTS
Type of assessment
Written examination, 4 hours under invigilation
written exam in lecturehall
Exam registration requirements

Submitted project report

Without aids
Marking scale
7-point grading scale
Censorship form
No external censorship
One internal examiner

If 10 or fewer register for the reexamination the examination form will be oral.

If the student has not handed in the project report, then it must be handed in two weeks prior to the re-exam. It must be approved before the exam.

Criteria for exam assesment

To obtain the grade 12 the student has to fulfill the Learning outcomes