Economics school-based assessment

Homemade: fried chicken and chips

Vs
FAST FOOD: Fried chicken and chips

Name: Jordana N. Khan

School: St. Augustine Girls’ High School, St. Augustine, Curepe

Subject: Economics

Teacher: Mrs. Balgaroo

Date Submitted: Thursday 9th March, 2017

Title: An investigation into the demand for Fast Food: Fried Chicken and Chips with special reference to
Homemade: Fried Chicken and Chips.
Acknowledgements
This study would not have been possible without the help of my peers whose parents
participated in and contributed to my survey. My thanks go out to my family for their love and support.
Furthermore, I would also like to thank my subject teacher for taking the time and patience to ensure
that I had the relevant information needed to successfully complete my SBA.

Introduction
Throughout the years, there has been an ongoing discussion about the pros and cons of Home-
cooked Foods and Fast Foods. People share varied opinions about which is better. In the opinions of
others, some say that “Fast Food saves time” and that it is developed by companies to taste better. It is
commonly believed that Fast Foods are only unhealthy if you eat them regularly without having a proper
balanced diet to combat diseases and things such as obesity, heart attacks and diabetes. Others say the
taste of home-cooked meals is generally better, because you can select fresh ingredients and can ensure
the ingredients that go into your food are clean and free of contaminants. Also, there has been a
continuous debate on whether the government should subsidize market food items so that citizens
would be encouraged to buy the healthier foods and lead a healthier lifestyle. In this SBA, I will be
receiving the feedback of the adults and asking them what could result if certain scenarios ever occur.
 Table of Contents

Title Page Number

Acknowledgements i
Introduction i
Title 1
Objectives 1
Presentation of Data 1-7
Interpretation and Analysis of Data 8-10
Findings 11
Recommendations 12
Bibliography 13
Appendix 1 14-15
Title:An investigation into the demand for Fast Food: Fried Chicken and Chips with special reference
to Homemade: Fried Chicken and Chips.

Objectives
 To determine the relationship between the prices and quantities of Fast Food: Fried Chicken and
Chips or Homemade Food: Fried Chicken and Chips
 To calculate and analyse the price elasticity of demand of Fast Food: Fried Chicken and Chips
taking into consideration the demand for Homemade Fried Chicken and Chips
 To determine which factors affect people’s decision to choose Homemade Foods over Fast
Foods, or vice versa

Presentation of Data
Thirty-two men and women who are considered the heads of their households and are the
breadwinners of their respective families were asked to fill out the questionnaires they were given. The
only requirement for doing this questionnaire was that they all had to be income earners and legal
adults, i.e. Over 18 years old.

*A sample of this questionnaire can be found in Appendix 1

Bar Chart 1.1 with table showing preference to consume Fast Food: Fried Chicken and Chips at the price
of $28 for a 2-piece snack box or Homemade Fried Chicken and Chips at the price of $17 for a 2-piece
snack box (ref #5 in Questionnaire)

Preference Number of Persons

Home-made: Fried Chicken and Chips 19
Fast Food: Fried Chicken and Chips 13

Preference

Number of Persons
 Bar Chart 1.2 with table showing the actions taken by persons if the price of Fast Food: Fried Chicken
and Chips increased from $28 to $33(ref #7 in Questionnaire)

Course of Action Number of Persons

Continue to purchase same amount of Fast Food: Fried Chicken and chips 10

Buy more ingredients to make more Home-made: Fried Chicken and Chips 10
Stop eating Fast Food: Fried Chicken and Chips 12

Number of Persons

Course of Action

Price Quantity
($) Demanded (Qd)
28 13
33 10
 Bar Chart 1.3 with table showing preference to consume both types of food on a regular basis,
without reference to price (ref #1 in Questionnaire)

Preference Number of persons

Home-made Food 26
Fast Food 6

Number of Persons

Preference

Bar Chart 1.4 with table showing ranges of monthly income per person (head of household) (ref #2 in
Questionnaire)
Range of Monthly Income Number of persons within that range
Under $5000 8
$5000-$10,000 10
$10,000-$15,000 8
Over $20,000 6

Number of
Persons

Range of Income
Doughnut 1.1 with table showing the different factors affecting people’s decision to purchase Fast Food:
Fried Chicken and Chips

Factors Number of persons

Cost 14
Quality of service 11
Advertising/Bandwagon Effect 2
Convenience 19
Taste 23
Bar Chart 1.5 with table showing actions taken if the prices of ingredients needed to make Home-made:
Fried Chicken and Chips drastically decrease

Course of Action Number of

Persons
Continue to purchase same amount of Fast Food: Fried Chicken and chips and eat 9
the same amount of Home-made: Fried Chicken and Chips
Buy more ingredients to make more Home-made: Fried Chicken and Chips 17
Stop eating Fast Food: Fried Chicken and Chips 6

Course of Action

Number of Persons
Pie Chart 1.1 with table showing reasons given as to why persons would choose to purchase Home-
made rather than Fast Food: Fried Chicken and Chips (more than one reason was given in some cases)

Reasons Number of persons

Healthier 14
Fast Food restaurants are unsanitary 4
Better quality 2
Knowledge of ingredients 3
Cheaper/More Economical 3
Tastes better than Fast Food 3
Could choose what to put into your food 2
No need to wait for food to arrive 1
Bar Chart 1.6 with table showing reasons given as to why persons think consumers are discouraged from
purchasing Fast Food: Fried Chicken and Chips besides the issues of being unhealthy and expensive
(more than one reason was given in some cases)

Reasons Number of persons

Poor customer service 12
Unsanitary Conditions 16
Foreign restaurants don’t profit host country 1
Time taken to obtain Fast Food 4
Poor Advertising 1
Bad taste/Poor choice of seasoning 2
Redundancy 1

Reason

Number of Persons
Interpretation and Analysis
Thirty-two adults completed this Fast Food VS Homemade Food questionnaire and the findings and
analysis are as follows:

 The price of a 2-piece snack box from a Fast Food restaurant is $28 while the cost to make 2
pieces of chicken with chips at home is $17.Of the 32 persons, 19 preferred to eat Homemade:
Fried Chicken and Chips while 13 preferred Fast Food: Fried Chicken and Chips. From the data
collected, more people chose to eat Homemade Food rather than Fast Food on a regular basis
and as such, more people chose to consume Homemade: Fried Chicken and Chips rather than
Fast Food: Fried Chicken and Chips. This preference may be so, since the cost to make
Homemade: Fried Chicken and Chips is cheaper than that of buying Fast Food: Fried Chicken and
Chips. (Ref Bar Chart 1.1)
Even though 10 persons had an income within the range of $5000 and $10,000, only 6
people had an income that was over $20,000 ,8 persons had incomes within the ranges under
$5000 and 8 persons had an income within the range of $10,000 to $15,000. This shows that
even though some persons may have been able to afford the everyday purchase of Fast Food in
general, they chose not to and instead preferred the Homemade Food. (Ref Bar Chart 1.4)

Analysis following price increase of a 2-piece meal

Price Quantity
($) Demanded (Qd)
28 13
33 10
Price ($)

33

28

0
10 13
Qd (Quantity Demanded) for Fast Food: Fried
Chicken and Chips
Fig 1.1 Demand Curve showing a shift in demand of Fast Food
 The First Law of Demand states that as the price of a good or service is lowered, consumer
demand increases, ceteris paribus (Gopie 2010). Similarly, as the price of a good or service is raised,
consumer demand decreases, ceteris paribus. Ceteris Paribus is a Latin phrase which translates to
“provided that other things remain the same/ unchanged”.

 Calculation and analysis of the price elasticity of demand of Fast Food: Fried Chicken and
Chips

Price Elasticity of Demand is referred to as the responsiveness of Quantity Demanded due to

changes in Price,
P.E.D (Price Elasticity of Demand), is calculated as follows:
0⁄ 𝛥𝑄𝑑 , that is the percentage change in Quantity Demanded divided
0 by the percentage change in Price.
P.E.D = 0⁄ 𝛥𝑃
0

The price of Fast Food: Fried Chicken and Chips for a 2-piece snack box, increases from $28 to
$33.

%ΔQd = New Demand – Old Demand X 100 = 10 – 13 X 100 = - 23.1

Old Demand 1 13 1

%ΔP = New Price – Old Price X 100 = 33-28 X 100 = 17.9

Old Price 1 28 1

Therefore, P.E.D = -23.1 = -1.3

17.9

The demand for Fast Food: Fried Chicken and Chips, in this small sample, is slightly elastic or the
demand is Price Elastic. Demand is elastic when the values for P.E.D range between 1 and infinity, i.e.
1< P.E.D < ∞, whereas demand is inelastic when the values for P.E.D range between 0 and 1, i.e. 0<
P.E.D < 1. When the price of a good or service is falling, there is greater elasticity. The P.E.D co-efficient
is negative because the percentage change in Quantity Demanded (%ΔQd) is negative. The P.E.D co-
efficient will always be negative once there is a negative inverse relationship between Price and
Quantity Demanded.

One factor that affects P.E.D relating to this scenario could be the quantity of substitutes, for
example, the Homemade Fried Chicken and Chips. If the available substitutes for a commodity are in a
greater amount and better, the P.E.D of that commodity will be greater.

Fast Food and Homemade Food are substitutes of each other. Substitute goods are goods that
can be used in place of other goods, as an alternative. Consumers can choose Fast Food over
Homemade Food or Homemade Food over Fast Food. The nature of substitute goods state that when
the price of one good goes up, the demand for that good decreases and the demand for the other
good increases. As the price of Fast Food: Fried Chicken and Chips rises, the demand for Homemade
Fried Chicken and Chips increases, as the demand for Fast Food: Fried Chicken and Chips is falling.
  Relationship between the prices and quantities of Fast Food: Fried Chicken and Chips or
Homemade Food: Fried Chicken and Chips, without reference to price.

Of the thirty-two persons who completed the questionnaire, 26 persons preferred Homemade
Food while only 6 persons preferred to eat Fast Food on a regular basis. This can be because
most of the persons surveyed (14 persons) think Homemade Food is healthier to consume. This
could result in the fall in the demand of Fast Food and a rise in the quantity demanded of
Homemade Food.
Some reasons given as to why persons think consumers are discouraged from
purchasing Fast Food: Fried Chicken and Chips besides the issues of the food being unhealthy
and expensive are: (Ref Bar Chart 1.6)

(1) The unsanitary conditions of the restaurant and the area used to prepare the food
(2) Poor customer service
(3) The time taken to obtain the Fast Food

 Determination of which factors affect people’s decision to choose Homemade Foods over Fast
Foods, or vice versa

From the Presentation of Data (Ref Doughnut 1.1), the most important factor affecting people’s
decision to purchase Fast Food: Fried Chicken and Chips is the Taste, and the least important
factor is the Advertising/Bandwagon Effect. This could be because the good being examined is
food and that consumers would obviously want to eat meals of good quality and excellent taste.

Changes in price causes movements along the curve, while factors affecting price causes shifts
in the curve.

Price D2
D1

0
Qd
Fig 1.2 Demand Curve showing a rise in the demand of Homemade Food
Findings
Based on the results in the Presentation of Data and what was discussed in the Interpretation
and Analysis, the findings of my study are:

1) Given a specific quantity i.e. a 2-piece snack box, of both the Homemade: Fried Chicken and
Chips and Fast Food: Fried Chicken and Chips, more persons preferred to eat Homemade: Fried
Chicken and Chips that cost $17 rather than Fast Food: Fried Chicken and Chips which cost $28.

2) The most outstanding factors negatively affecting people’s decision to consume Homemade:
Fried Chicken and Chips are taste followed by convenience (Ref Doughnut 1.1). Additionally,
cost and quality of service ranked as important factors affecting the demand of Fast Food: Fried
Chicken and Chips. (Ref Bar Chart 1.6)

3) The demand for Fast Food: Fried Chicken and Chips is elastic and there is an inverse or negative
relationship between the price of the Fast Food: Fried Chicken and Chips, and the quantity
demanded of Fast Food: Fried Chicken and Chips.
Recommendations
1) Fast Food restaurants can aim to prepare meals that consist of better quality and healthier
ingredients to gain a larger clientele. Furthermore, they should improve their customer service
and pay more attention to the conditions under which food is prepared and stored. (Ref Bar
Chart 1.6 and Pie Chart 1.1)

2) The government can subsidize common market items so that consumers may be able to afford
them and more frequently purchase them. Persons will be encouraged to purchase the cheaper
produce and decide to make more homemade foods. This can deter people’s decision to choose
Fast Food over options that can lead to a healthier lifestyle. (Ref Bar Chart 1.5)

3) Some ways to encourage the PED of Fast Food: Fried Chicken and Chips to be more inelastic are:
making the food more attractive with a variety of shapes, colours and smells, having the food be
quick to prepare and by persuading the consumer that purchasing Fast food is contributing to
being attached to higher social classes.
Appendix 1
Questionnaire
My name is Jordana Khan and I attend St. Augustine Girls’ High School. This questionnaire is part of an
investigation related to my Economics SBA. Your responses will be greatly appreciated and all personal
views and comments will be held confidential.
Home-made Foods VS Fast Foods

1. Which do you prefer to eat on a regular basis?

Fast Foods
Home-made Foods

2. In which range is your monthly income?

Under $5000 $5000-$10,000

$10,000-$15,000 Over $20,000

3. How often do you or your family members order fried chicken and chips?
Once a week More than once a week
Once a month Almost never

4. How often would you eat home-made fried chicken and chips as your main meal?
Once a week More than once a week

Once a month Almost never

Everyday

5. Which do you prefer: From Fast Food restaurant:2-piece snack box -$28
: From Home:2 pieces of chicken with chips-$17
Home-made Fried Chicken and Chips Fast Food: Fried Chicken and Chips

6. Tick which factor(s) affect your decision to purchase Fast Food: Fried Chicken and Chips
Cost Quality of Service
Advertising/Bandwagon Effect Taste
Convenience
7. If the price of Fast Food: Fried Chicken and Chips for a 2-piece snack box, increases from $28 to
$33, would you…

Continue to purchase the same amount of Fast Food: Fried Chicken and Chips

Buy more ingredients to make more Homemade Fried Chicken and Chips

Stop eating Fast Food: Fried Chicken and Chips altogether

8. If the prices of ingredients to make Homemade: Fried Chicken and Chips drastically decrease,
would you…

Continue to purchase the same amount of Fast Food: Fried Chicken and Chips and eat the same
amount of Homemade Fried Chicken and Chips

Buy more ingredients to make more Homemade Fried Chicken and Chips

Stop eating Fast Food: Fried Chicken and Chips altogether

9. If fast food became unhealthier, but cheaper, would you choose to more regularly purchase fast
food?

Yes No

10. If the price of making the healthier homemade food became more expensive, would you choose
to more regularly purchase Homemade Food?
Yes No

11. Why would you choose to purchase Homemade rather than Fast Food: Fried Chicken and Chips
or vice versa?

12. Besides the issues of being unhealthy and expensive, give one other reason as to why you think
consumers are discouraged from purchasing Fast Food: Fried Chicken and Chips.
Bibliography
http://www.livestrong.com/article/517636-homecooked-meals-vs-fast-food-meals/
Gopie. P. (2010).Economics for CSEC Examinations, Macmillan Publishers Ltd.
4) Generally, Fast Food follows the First Law of Demand, which states that as price decreases,
demand increases and vice versa. In this case, as the price of Fast Food increased, there was a
fall in demand of Fast Food, which consequently led to a rise in the demand of Homemade Food.

5) If the prices of ingredients required to make Homemade: Fried Chicken and Chips drastically
decrease, most persons opted to buy more ingredients to make more Homemade: Fried Chicken
and Chips instead of continuing to purchase the same amount of Fast Food: Fried Chicken and
Chips and Homemade: Fried Chicken and Chips. Additionally, these persons forwent the other
alternative of not consuming any more Fast Food: Fried Chicken and Chips.