The Effect of Sell-by Dates on Purchase Volume and Food Waste

This article constructs a theoretical model of rational food waste and analyzes how an extension of a food product's sell-by date affect a household's decisions of purchase volume and food waste. We then use the elimination of New York City's regulation of sell-by dates for pasteurized milk products as an empirical case, and examine whether the city’s new policy effectively reduces food waste and improves consumer welfare. Our results suggest that the new policy reduces purchase volume by about 10%. Both theoretically and empirically, we show that while the observed quantity declines, the actual consumption of milk increases, implying a reduction in food waste by more than 10%. Furthermore, we prove that this consumer welfare-improving pattern is generalizable to all types of perishable food with price-inelastic demand