Stumped. Looking at US wheat consumption data since 2002. Total wheat consumption is negatively correlated with per capita wheat consumption (R=-.2). My intuition is that this has something to do with wheat consumption not being evenly distributed by consumer affluence. i.e. The top 20% don't eat wheat at all and the bottom 20% eat more wheat than average. But, I still can't connect how this would cause per capita consumption and total consumption to diverge. Any ideas? That is, how can total wheat consumption go down in a year when per capita wheat consumption goes up? Thanks!
Is it possible for total consumption to go up but per capita consumption to go down?
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$\begingroup$
probability-distributions
average
correlation
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0Change in population would be the obvious other factor... – 2017-01-18
2 Answers
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Per capita consumption is total consumption divided by population. If the population rises faster than the total you can have the total increase and the per capita decrease.
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0Thanks. That half of it makes sense, but the part that stumps me is that, in some years, the total decreases while per capita increases. – 2017-01-18
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0That is a separate question. Wheat production fluctuates, so it is not surprising that total consumption fluctuates. – 2017-01-18
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0The part that I don't get is, why would total consumption fluctuate independent of per capita consumption? Let's say wheat production is low this year, so wheat prices are low. And, let's pretend that wheat price-demand elasticity is bigger than it is. Why wouldn't per capita wheat consumption decrease alongside total consumption? – 2017-01-18
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If the population rises then if peoples' behaviour is unchanged then total consumption increases but obviously per capita consumption remains the same. There could be many reasons why behaviour changes. An epidemic of gluten intolerance, or maybe people are getting richer thus chose to spend there money on more expensive alternatives. In short, beware of time series data.
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0Hehe. Thanks. That's my working hypothesis. When times are good, people who can afford it trade up to wheat alternatives, while people who can't afford to trade up just eat more wheat. I'm thinking that, because there are more poor people than rich people, this differential impact does something weird to the per capita numbers...But, I can't pinpoint what it is. – 2017-01-18