Regional Analysis of Household Income and Milk Spending During the COVID-19 Pandemic in Mexico

Abstract

This analysis was conducted in the context of the crisis caused by the COVID-19 pandemic, when the uncertainty and demand for food modified consumption patterns. Therefore, this study aimed to analyze variations in the expenditures allocated to pasteurized and powdered milk during and after the pandemic, considering the socioeconomic and demographic factors influencing these choices. A cross-sectional ordinary least squares (OLS) regression model was implemented using data from the National Household Income and Expenditure Survey for 2018, 2020, and 2022. The model evaluated variables such as income, household size, educational level, and gender of the household head, as well as the presence of minors and older adults at the regional level. The findings demonstrated that, in 2020, expenditure on pasteurized milk exhibited an elasticity of 0.888, suggesting heightened sensitivity to income during the pandemic period. In contrast, the elasticity of powdered milk was lower, with a value of 0.013 between 2018 and 2020, and negative values by 2022. Additionally, households headed by women, households with a higher level of education, and households with children spent more on pasteurized milk. These findings confirm the importance of milk as an essential commodity and highlight the substitute role of powdered milk in low-income households.

1. Introduction

The unexpected COVID-19 pandemic has been a complicated moment for all nations since the first cases of this new disease spread exponentially. Since then, different governments have implemented diverse emergency health measures intended to safeguard the health of their populations. These urgent measures temporarily suspended all non-essential activities in the public, social, and private sectors, involving family lockdown, the cancelation of mass events, closure of schools and workplaces, and mandatory social distancing. According to Aguilar-Lopez et al. [1] and Caldera-Villalobos et al. [2], food chain supplies had a direct impact on food-away-from-home and food-at-home spending by limiting the time that shops, markets, banks, schools, and cultural activities were open to the public or the capacity in which they were allowed to operate during the COVID-19 pandemic. Therefore, the pandemic generated an economic crisis due to a prolonged period of decline in productivity resulting from a compromise between supply and demand [3].

In contrast to other crises, the effects of the COVID-19 pandemic on production and aggregate demand were unique because they forced millions of people to stay at home. In Mexico, the crisis of 2020 resulted in an average reduction in the gross domestic product (GDP) by 8%, accompanied by an unemployment rate that increased by approximately 5.5% compared to 2019, and 44% of overall employment was at high risk of being affected by the pandemic [4,5]. The sector most affected was informal employment, which experienced a contraction of 10.4 million jobs. Consequently, the proportion of the population with labor income below the cost of shopping baskets has increased. This increase was particularly marked among women who had experienced a significant decline in income [6]. According to Engels’ economic theory, when a family budget is negatively impacted by income loss due to layoffs, or when the possibility of a layoff becomes a source of uncertainty, households tend to place a higher priority on food consumption. In other words, it is predicted that the share of expenditure on food will increase relative to the share of other items. While lower-income households allocate a larger budget to food, higher-income households may reduce the quality of their food to maintain a general level of consumption across various types of goods [7]. In this respect, McKenzie [8] indicated that the manner in which households modify their food expenditure in response to a shock in aggregate demand is contingent on their level of income and the structure of the household.

It is hypothesized that milk consumption increased during and in the aftermath of the pandemic, and not solely because of the income effect. Rather, it is also considered that milk is regarded as a foodstuff with high nutritional value (a basic necessity). This suggests that this was a key factor influencing consumer preferences during the pandemic. Furthermore, it is evident that families attempted to maintain their milk consumption by opting for products such as powdered milk, which has been demonstrated to increase yields in large households. As with the extension of the storage period, this became a pivotal element during the pandemic, and it is postulated that the model of productive specialization of the different regions that make up the country exerted a significant influence on the modification of consumption patterns. The crisis engendered by the novel coronavirus disease (COVID-19) manifested a pronounced regional dimension that has received inadequate consideration.

Among the most affected economic activities, the industrial sector stood out in the central region, with a 10.2% drop in production, followed by the service sector, with a fall of 7.9%. While tourism in the south showed a contraction of just over 58% in 2020, the only sector that showed progress, with a positive growth rate of 2%, was the primary sector in the western region, which was maintained throughout the pandemic [5]. The growth of the primary sector was due to the fact that households tend to prioritize food over any other goods during times of crisis [8,9,10,11]. Interestingly, the first confinement suggestions and uncertainty generated by the lack of knowledge regarding the transmission channels of the virus led to an increase in demand for healthy foods [10].

According to Baker et al. [10], household consumption prioritized food delivery and grocery spending in the United States at the same time that the COVID-19 pandemic increased the population. Also, the authors reported that spending responded most strongly in states with active shelter-in-place orders, although individuals in all states had sizable responses. Similarly, the Mexican National Institute of Statistics and Geography reported that the household consumption of essential goods increased during the pandemic and remained the same after the pandemic. According to Carrillo et al. [12], household consumption can generate new forms of consumption for the same type of goods. Although there is a list of goods that we consider necessary, some stand out for their nutritional value, easy access, and low prices, such as milk and its derivatives.

Milk and dairy products from ruminants (cows, ewes, and goats) are recognized by the Mexican population and play an important role in health promotion [13,14]. In addition, pasteurized milk has been linked to a healthy diet that increases the immune capacity and prevents malnutrition and diseases [14]. Uscanga-Domínguez et al. [15] reported that the consumption of pasteurized cow milk has remained stable in Mexico, and its production has increased, because Mexican consumers consider milk to be an essential part of a basic food basket for its nutritional value. Milk is an excellent source of biologically valuable proteins [16]. Diverse studies have reported that fluid milk contains large amounts of amino acids that increase the capacity to create tissues in the human body, especially in young populations, and help regenerate muscle tissue in adults [17]. The most important protein in milk, casein, stimulates systemic immunity and transports two crucial minerals, calcium and phosphorus [18]. Additionally, fluid milk is rich in whey proteins and fat, which are sources of peptides with biological activity, and contains sources of fatty acids, such as linoleic acid (C18:2) in its two forms, cis-9 and cis-12, which are considered to be optimal for human health [18,19]. Furthermore, powdered milk serves as a nutrient source comparable to pasteurized milk. Various studies have suggested that milk powder may have a positive impact on vulnerable populations through fortified blends incorporated into the dairy industry [20,21,22]. Hoppe et al. [21] reported the potential beneficial effects of incorporating powdered milk into the diets of vulnerable groups, such as malnourished individuals, during periods of illness. Moreover, Vall et al. [20] noted that, during the COVID-19 pandemic, several African countries prioritized the importation of milk powder as a strategy to mitigate potential disruptions in the food supply chain. However, there is a paucity of research on the powdered milk market in Latin America, and existing studies are inconclusive regarding consumer preferences for powdered milk compared with pasteurized or fluid milk during the COVID-19 pandemic. The variation in expenses for the purchase of pasteurized milk and dairy products partially reflects the average changes in milk prices each year [23]. As illustrated in Figure 1, there was a 0.5 USD increase in the average price per liter during the pandemic. This increase resulted in milk prices reaching 8 MXN by 2022 [24]. A review of spending data reveals that milk expenditure in 2022 reached a level comparable to that of the pre-pandemic era [23,24]. The findings indicate that households have adopted a strategy of moderating their consumption of other foods with the aim of mitigating the decline in milk consumption triggered by escalating prices [25,26,27]. Considering powdered milk consumption, given the absence of significant price fluctuations by 2022, it is plausible that numerous households may have adopted this format to be responsible for increased consumption.

Based on the previous hypothesis, the current study aimed to analyze, through the variations in expenditure on pasteurized milk versus powdered milk, the influence of socioeconomic and geographic variables that could have influenced household food choices during the pandemic. The extent to which households prioritized foods such as milk over others, income restrictions, lack of geographic access, and the emergence of new taste preferences could have produced changes in consumption patterns towards options such as fortified milk or more affordable substitute goods.

2. Materials and Methods

2.1. Data Collection

The database employed to execute the model was constructed using information derived from the Encuesta Nacional de Ingresos y Gastos de los Hogares (ENIGH; from its former name in English: National Survey of Household Income and Expenditure) reports on household income and expenditure in Mexico, which were published biennially by the National Institute of Statistics and Geography in Mexico (INEGI; from its former name in Spanish: Instituto Nacional de Estadística, Geografía e Informática). The sampling unit is defined as the household, a variable characterized by the group of people, whether related or not, who usually reside in the same dwelling and share food expenses [25,26,27]. Each household is referenced by a unique folio, which reports information such as the number of members, number of individuals receiving age, gender, level of education, occupation, and geographical location. The data cover three distinct periods from 2018 to 2022: 2018, prior to the pandemic, with 74,647 households analyzed [25]; 2020, during the height of the pandemic, with 89,006 [26]; and 2022, in the aftermath of the pandemic, with 90,102 [27].

Additionally, the ENIGH discloses the elements that comprise reported income. Consequently, the conceptual framework employed to construct the income variable is current income, which exclusively encompasses monetary income. This refers to all resources acquired in monetary form, including but not limited to the receipt of a salary, profits from sales, aid or transfers, the sale of assets, or rental payments. In addition, current expenditures are employed to incorporate the milk spending variable. The spending variable encompasses monetary expenditure; that is, expenditure that occurs through the direct exchange of money to procure food. In this case, monetary expenditure was allocated to the acquisition of pasteurized and powdered milk. In Mexico, according to the types of goods prioritized by households, based on the main items of expenditure on food consumed by each household for 2018, 2020, and 2022, milk was the most consumed beverage, as described in

Table 1. List of the main items of expenditure on food consumed by households.

The Food Expenses Item 1	2018	2020	2022
Meat	2431	2557	2801
Cereals	1880	1882	2079
Vegetables, pulses, and seeds	1231	1325	1345
Milk and dairy products	1066	1019	1069
Alcoholic and non-alcoholic beverages	930	974	1022
Fruit	493	526	548
Eggs	383	426	514
Fish and seafood	254	280	269
Oils and fats	141	140	201
Tubers	170	168	198
Coffee, tea, and chocolate	106	111	122
Sugar and honey	114	131	112
Spices and seasonings	101	103	110

¹ Authors’ elaboration based on ENIGH. The values are expressed in constant 2022 MXN to maintain comparability.

.

As demonstrated in the table, the consumption of milk and dairy products is among the foodstuffs that families prioritize. The amounts represent the average quarterly expenditure allocated to the consumption of each type of food, denoted in nominal MXN for 2022. The average expenditure allocated to the purchase of milk and dairy products was 1066, 1019, and 1069 MXN in 2018, 2020, and 2022, respectively [27]. This represents one of the most pronounced declines in expenditure allocated to the purchase of milk and dairy products compared with other food items, with a decrease of 4.4 percentage points during the pandemic. Nevertheless, by 2022, spending on milk and dairy products had recuperated to pre-pandemic levels, with average expenditures rising by 4.9 percentage points.

To monitor milk consumption at the regional level, the states that comprise the nation were grouped into eight regions according to the classification system developed by the INEGI [27]. The INEGI employed a set of criteria to categorize Mexican states into distinct regions. These criteria encompass various dimensions, including culture, demographics, society, climatology, and economics. The objective was to identify states that shared similarities across these factors, thus facilitating the establishment of coherent regional groupings. As illustrated in Figure 2, the northwest region (NW) comprises the states of Baja California, Baja California Sur, Sonora, Chihuahua, Sinaloa, and Durango. In contrast, the northeast (NE) is constituted by states such as Coahuila, Nuevo León, and Tamaulipas. The western (W) region encompasses the states of Nayarit, Jalisco, Colima, Michoacán, and Aguascalientes. The north-central (NC) region comprises the states of Zacatecas, San Luis Potosí, Guanajuato, and Querétaro. The south-central (SC) region includes Mexico City, the State of Mexico, Hidalgo, Morelos, and Tlaxcala. The eastern (E) region consists of Puebla and Veracruz. Guerrero, Oaxaca, and Chiapas represent the southwest region (SW). Finally, the southeast (SE) region includes the states of Tabasco, Campeche, Yucatán, and Quintana Roo.

2.2. Estimated Model

The current study is based on the econometric model developed by McKenzie [8], who analyzed household consumption patterns using INEGI information. In contrast to McKenzie [8], the present study used a cross-sectional ordinary least squares (OLS) regression model to examine the consumption patterns of pasteurized and powdered milk prior to, during, and after the pandemic period. In order to accomplish this objective, it was necessary to calculate the logarithm of the expenditure on pasteurized and powdered milk as a function of income, with the income elasticity being interpreted from this. In other words, the variation in expenditure on these goods was measured with respect to a 1% change in income, in addition to controlling for a series of independent variables such as the sex and educational level of the household head, household size, demographic structure, and employability across the various regions of the country by type of household classified according to income level (quintiles).

Therefore, Equations (1) and (2) were determined, in which the dependent variables are expenditure in liters of pasteurized milk and expenditure on powdered milk (kg), respectively. Similarly,

Table 2. List of dependent and independent variables.

Variable	Definition	Values
Spending_milk	This term refers to the sum of money spent by families on the purchase of pasteurized milk.	This is a variable continuously expressed in the logarithm that represents the value of the variation in family expenditure on pasteurized milk consumption resulting from a 1% variation in income.
Spending_mp	This term refers to the sum of the money spent by families on purchasing whole or powdered skimmed milk.	This is a variable continuously expressed in logarithms that represents the value of the variation in family expenditure on powdered milk consumption resulting from a 1% variation in income.
Income	This term denotes all monetary resources that are available, including but not limited to salaries and any assets that have the potential to be monetized.	A continuous variable expressed in logarithms was used to measure the changes in family income.
Gender	This term refers to the gender of the head of the family responsible for the majority of familial expenses.	This dummy variable assumes a value of one when the family head is male or two when the head of the family is female.
Size	This expression denotes the number of individuals residing within a given domicile.	The value of the dummy variable in question is designated as 1 when no more than four members reside within a given household. When the number of individuals sharing a household exceeds four, the assigned value is 2.
Demographic	This variable categorizes households based on the presence or absence of individuals under the age of 11 and over the age of 65.	The value of the variable (<11 years) is 1 if there is at least one household member under the age of 11. It takes a value of zero when there are no members of the household under 11 years of age. The value of the variable (>65 years) is 2 if there is at least one household member around the age of 65 years. It takes a value of zero in the absence of such a member.
Employment	This variable indicates the presence of at least one person in a household who receives financial compensation for their labor or work in a productive activity.	A value of 1 is assigned if there is at least one member of the household who is over 14 years old and receives payment for their work.
Education	This term refers to the educational level of the head of the family. The variable ranges from no education to postgraduate studies.	The assigned values are 0 for no academic qualifications, 1 for completion of elementary education, and 2 for completion of vocational education or a degree.
Region	The geographical location of households is determined by the region. This variable is a set of binary variables relative to a reference category: the region with the lowest consumption.	○ Northwest = This dummy variable equals 1 for households in the northwest and 0 for others. ○ Northeast = This dummy variable equals 1 for households in the northeast and 0 for others. ○ Western = This dummy variable equals 1 for households in the west and 0 for others. ○ North-Central = This dummy variable equals 1 for households in the north-central region and 0 for others. ○ South-Central = This dummy variable equals 1 for households in the south-central region and 0 for others. ○ East = This dummy variable equals 1 for households in the east and 0 for others. ○ Southwest = This dummy variable equals 1 for households in the southwest and 0 for others.
Quintile	This constitutes one of the five categories into which a household distribution arranged in accordance with income level is divided. This variable is a set of binary variables relative to a reference category: the quintile with the lowest income.	Quintile 2 = This dummy variable assumes a value of 1 when household income falls within the range of 30 to 40 percent of the population distribution, according to income level. Quintile 3 = This dummy variable assumes a value of 1 when household income falls within the range of 50 to 60 percent of the population distribution, according to income level. Quintile 4 = This dummy variable assumes a value of 1 when household income falls within the range of 70 to 80 percent of the population distribution, according to income level. Quintile 5 = This dummy variable assumes a value of 1 when household income falls within the range of 90 to 100 percent of the population distribution, according to income level.

The information used for the variables was deflated and weighted by the expansion factor proposed in the ENIGH methodology in order to compare them. In 2018, the total number of observations was 74,647. In 2020, the total number of observations was 89,006. In 2022, the total number of observations was 90,102.

describes all variables included in the equations and the values assigned to the dummy variables.

$$\begin{gathered} {\mathrm{l}\mathrm{o}\mathrm{g}(spending\_milk)}_{it} \\ ={\alpha }_{it}+{\beta }_1{\mathrm{l}\mathrm{o}\mathrm{g}\left(income\right)}_{it}+{\beta }_2{Gender}_{it}+{\beta }_3{Size}_{it} \\ +{\beta }_4{Demographic}_{it}+{\beta }_5{Employment}_{it}+{\beta }_6{Education}_{it} \\ +\sum _{r=1}^{r-1}{\beta }_7{Region}_{it}+\sum _{q=12}^{q-1}{\beta }_8{Quintile}_{it}+{ϵ}_{it} \end{gathered}$$

(1)

$$\begin{gathered} {\mathrm{l}\mathrm{o}\mathrm{g}(spending\_mp)}_{it} \\ ={\alpha }_{it}+{\beta }_1{\mathrm{l}\mathrm{o}\mathrm{g}\left(income\right)}_{it}+{\beta }_2{Gender}_{it}+{\beta }_3{Size}_{it} \\ +{\beta }_4{Demographic}_{it}+{\beta }_5{Employment}_{it}+{{\beta }_{6}Education}_{it} \\ +\sum _{r=1}^{r-1}{\beta }_7{Region}_{it}+\sum _{q=1}^{q-1}{\beta }_8{Quintile}_{it}+{ϵ}_{it} \end{gathered}$$

(2)

where

i indicates each household;

t indicates the period of time.

3. Results

This study has shown that the coefficients in all of the tables were obtained by estimating the models using so-called robust standard errors. The results of the Breusch–Pagan test indicated that the model presented a significant degree of heteroscedasticity in the categories of pasteurized milk and powdered milk (BP = 37,560,812, df = 2, p < 2.2 × 10⁻¹⁶ and BP = 37,552,978, df = 2, p < 2.2 × 10⁻¹⁶, respectively). To guarantee the validation of the coefficients and their statistical significance (p < 0.05), the White test was used to analyze the data with the introduction of quadratic terms. Robust standard errors were used for this purpose. Similarly, given the presence of distinct observations in 2018, 2020, and 2022, the implementation of dummy variables for each period was necessary. This approach was undertaken to capture specific aggregate effects for each year, thereby circumventing issues related to autocorrelation. Despite the large sample size (N > 70,000), the errors were normally distributed. To ensure a correct interpretation of the percentage results, the term exponential was also used in the coefficients of the dummy variables.

In general, the present study revealed that the analysis of variations in household expenditure demonstrated substantial shifts in consumption patterns across the three periods. These outcomes corroborate the repercussions of the health crisis on family income and the dairy market. Specifically, the variability in expenditure on pasteurized milk in 2020 (0.088, p < 0.01) showed a greater sensitivity to changes in income than that observed in 2018 (0.064, p < 0.01). In 2022, however, elasticity returned to its pre-pandemic level (0.0068, p < 0.01). In the case of milk powder, the elasticity was positive but low in 2018 (0.013, p < 0.05), declined in 2020 (0.006, not significant), and became negative in 2022 (−0.006, not significant), reflecting a reduced substitution role for this product once households regained economic stability.

3.1. Pasteurized Milk

Table 3. Income elasticity for the socioeconomic variables of pasteurized milk demand.

Variables /Years 1	2018	2020	2022
Income	0.064 *** (0.012)	0.088 *** (0.019)	0.068 *** (0.020)
Gender (female)	0.038 *** (0.012)	0.039 *** (0.011)	0.060 *** (0.010)
Elementary education	0.203 *** (0.018)	0.207 *** (0.016)	0.214 *** (0.018)
Higher education	0.285 *** (0.026)	0.292 *** (0.023)	0.313 *** (0.024)
Size (≥4)	0.140 *** (0.014)	0.141 *** (0.012)	0.125 *** (0.012)
Demographic (<11 age)	0.231 *** (0.013)	0.204 *** (0.012)	0.214 *** (0.012)
Demographic (>65 age)	−0.008 (0.014)	0.002 (0.012)	0.039 *** (0.012)
Employment	−0.073 *** (0.020)	−0.051 *** (0.016)	−0.056 *** (0.016)

¹ The values in parentheses correspond to the standard error of the estimate of each coefficient. The asterisks indicate the level of significance of the coefficients. A high level of significance is indicated by three asterisks.

presents the findings regarding the variation in expenditures as a function of income, the influence of the gender and educational level of the head of each household, and the demographic structure and size of the household. With regard to the income variable, expressed in elasticities, spending on pasteurized milk was sensitive to changes in income throughout the three periods. For instance, in 2018, the coefficient was 0.064, indicating that for every 1% increase in household income there was a 6.4% increase in expenditure on pasteurized milk. In 2020, the elasticity rose to 0.088, suggesting that spending on pasteurized milk was more sensitive to income during the pandemic. This can be partially explained by an average milk price increase of 7%, as shown in Figure 1. However, this also indicates that households were willing to allocate more income to purchase milk. By 2022, income elasticity was restored to pre-pandemic levels, with a coefficient of 0.068. The documented rise in milk consumption of around 6% by 2022 (Figure 1) substantiates the preceding hypothesis, confirming the prevailing perception of milk as a non-negotiable commodity in consumer nutritional intake patterns.

The coefficients exhibited a positive and statistically meaningful relationship with respect to the gender variable across the three years, as presented in Table 3. This means that households headed by women were more likely to spend money on pasteurized milk than households headed by men. This trend has been increasing since the pandemic. For example, in 2018, the coefficient was 0.038, indicating a slight change to 0.039 by 2020. The coefficient was 0.060 in 2022. It is plausible that an increase in the cost of milk is a contributing factor. However, given the 50% surge in expenditures between 2020 and 2022, the observed trend suggests a prioritization of pasteurized milk consumption among female consumers. From the same table, it can be seen that the education variable has a significant impact on spending on pasteurized milk. Households headed by a person who has completed primary education spent, on average, 21% more on pasteurized milk over the three periods. For households with higher education, the coefficient increased to 29.7% of the expenditure allocated to the purchase of milk. This indicates that households with a head with a higher education level spent more on milk. Across the years, there is evidence that households at both levels of education adjusted their consumption to the post-pandemic price increase. For the variable denoting household size, in 2018, the average expenditure of households with more than four members on pasteurized milk was 13.5% higher than that of households with fewer people (Table 3). The decline in the coefficient from 14% in 2018 to 12.5% in 2022 suggests that the economic constraints that ensued from the pandemic and the subsequent increase in milk prices had the most significant impact on larger households. These households were subject to the constraint of reducing their expenditure on pasteurized milk. In the case of the demographic variable, the relationship between the presence of minors in the household and high expenditure on pasteurized milk was positive and statistically significant. Thus, these households spent 20.4–23.1% more than households with no children. In 2018, households with minors spent 23.1% more on pasteurized milk than households without children under 11. The spending by these households fell slightly by 20.4% and 21.4% in 2020 and 2022, respectively. However, this trend suggests that spending has recovered following the pandemic. In the case of the coefficient for households with at least one member over the age of 65, the results are not significant. This finding suggests that households with older members began to allocate a greater proportion of their milk expenditures after the pandemic. The lack of significance in the increase in spending on pasteurized milk after the pandemic could be due to an increase in price and a possible positive change in preferences. In 2018, the coefficient of the variables for households with at least one employed member showed a downward trend, meaning that these households spent 7.3% less on pasteurized milk (Table 3). This trend stopped at 5% during the year of the pandemic and then increased to 5.6% by 2022. This can be interpreted as slightly higher milk consumption in rural areas.

Table 4. Income elasticity of pasteurized milk demand in Mexico, by region.

Variables/Years 1	2018	2020	2022
Northwest	0.868 *** (0.015)	0.644 *** (0.014)	0.654 *** (0.013)
Northeast	0.994 *** (0.017)	0.634 *** (0.017)	0.659 *** (0.016)
Western	1.069 *** (0.018)	0.912 *** (0.016)	0.984 *** (0.016)
North-central	0.972 *** (0.017)	0.744 *** (0.016)	0.735 *** (0.015)
South-central	0.846 *** (0.018)	0.559 *** (0.017)	0.611 *** (0.016)
East	0.510 *** (0.020)	0.288 *** (0.019)	0.405 *** (0.018)
Southwest	0.147 *** (0.017)	0.009 (0.015)	0.082 *** (0.01)

¹ The values in parentheses correspond to the standard error of the estimate of each coefficient. The asterisks indicate the level of significance of the coefficients. A high level of significance is indicated by three asterisks.

shows the elasticity of pasteurized milk expenditure by region. The coefficients are the result of a comparison of spending behavior with the region that had the lowest consumption (SE). The results showed a high elasticity of expenditure on pasteurized milk over the three periods. However, these two regions exhibited interesting differences. For instance, the W region yielded the highest coefficients, as evidenced by its 1.069 coefficient of 2018. In 2020, the W region’s coefficient decreased to 0.912, and it increased slightly to 0.984 by 2022. The other region that showed a similar behavior was the NC region, which decreased from an elasticity of 0.972 in 2018 to 0.744 during the pandemic. Subsequent analysis revealed that, in 2022, the coefficient stood at 0.735, indicating that consumption did not return to pre-pandemic levels. Despite this, it was determined that the NC and W regions remained the largest consumers at the national scale. These results can also be explained by the fact that the largest centers of milk production are found in these regions.

Table 5. Income elasticity of pasteurized milk demand by quintile.

Variables/Years 1	2018	2020	2022
2nd quintile	0.132 *** (0.021)	0.097 *** (0.018)	0.107 *** (0.019)
3th quintile	0.270 *** (0.028)	0.125 *** (0.024)	0.153 *** (0.025)
4th quintile	0.326 *** (0.035)	0.170 *** (0.031)	0.182 *** (0.031)
5th quintile	0.319 *** (0.048)	0.164 *** (0.042)	0.194 *** (0.042)

¹ The values in parentheses correspond to the standard error of the estimate of each coefficient. The asterisks indicate the level of significance of the coefficients. A high level of significance is indicated by three asterisks.

presents the income elasticities of pasteurized milk expenditure categorized by quintiles. The coefficients were derived from a comparative analysis of expenditure patterns with the quintile exhibiting the lowest consumption levels (Quintile 1). The quintiles with the highest incomes allocated a substantially greater proportion of their budget to purchase pasteurized milk with respect to Quintile 1. This was despite the fact that higher-income households decreased their expenditure during the pandemic and subsequently increased their milk consumption by 2022.

3.2. Powdered Milk

Table 6. Income elasticity for the socioeconomic variables of powdered milk demand.

Variables/Years 1	2018	2020	2022
Income	0.013 ** (0.006)	0.006 (0.005)	−0.006 (0.007)
Gender (female)	−0.004 (0.003)	−0.010 *** (0.003)	−0.005 * (0.003)
Elementary education	−0.007 (0.006)	0.0000 (0.005)	0.001 (0.005)
Higher education	−0.001 (0.008)	0.006 (0.007)	0.006 (0.007)
Size (≥4)	−0.006 (0.004)	−0.002 (0.004)	0.007** (0.003)
Demographic (<11 age)	0.070 *** (0.004)	0.060 *** (0.004)	0.044 *** (0.004)
Demographic (>65 age)	0.001 (0.004)	0.001 (0.003)	0.008 ** (0.004)
Employment	−0.006 (0.005)	−0.005 (0.004)	−0.003 (0.003)

¹ The values in parentheses correspond to the standard error of the estimate of each coefficient. The asterisks indicate the level of significance of the coefficients. A high level of significance is indicated by three asterisks. A medium level of significance is indicated by two asterisks. A low level of significance is indicated by one asterisk.

presents the findings regarding the variation in expenditure in relation to the changes in income, the influence of the gender and educational level of the head of household, and the estimated coefficients for the demographic structure and household size. Regarding the income variable, it was observed that the elasticity had a slight positive sensitivity in 2018. This means that for every 1% of the income earned, 1.3% was spent. This relationship weakened in 2020 until it became negative in 2022. In the post-pandemic context, spending on powdered milk was less of a priority for higher-income households, even compared to the consumption of pasteurized milk. Moreover, families with children aged under eleven showed higher levels of powdered milk consumption than the rest.

As illustrated in

Table 7. Income elasticity of powdered milk demand in Mexico, by region.

Variable/Years 1	2018	2020	2022
Northwest	−0.077 *** (0.008)	−0.051 *** (0.006)	−0.034 *** (0.005)
Northeast	−0.090 *** (0.008)	−0.056 *** (0.007)	−0.044 *** (0.006)
Western	−0.083 *** (0.008)	−0.059 *** (0.007)	−0.041 *** (0.006)
North-central	−0.066 *** (0.009)	−0.050 *** (0.007)	−0.044 *** (0.006)
South-central	−0.095 *** (0.008)	−0.063 *** (0.006)	−0.050 *** (0.005)
East	−0.073 *** (0.009)	−0.050 *** (0.007)	−0.045 *** (0.006)
Southwest	−0.079 *** (0.008)	−0.047 *** (0.007)	−0.031 *** (0.006)

¹ The values in parentheses correspond to the standard error of the estimate of each coefficient. The asterisks indicate the level of significance of the coefficients. A high level of significance is indicated by three asterisks.

, which presents the estimates for powdered milk spending by region, the coefficients were derived through a comparative analysis of expenditure patterns across different regions, with the southeast region serving as the reference point for benchmarking. Contrary to the findings presented in Table 4, all of the regions exhibited negative elasticity. However, in all cases, the relationship was less pronounced from 2020 onwards. This indicates that although expenditure was negative, it was not as low as at other times; that is, there was only a small increase. This can be explained by the fact that the perception of powdered milk as an inferior product may have changed to some extent.

Table 8. Income elasticity of powdered milk demand by quintile.

Variable/Years 1	2018	2020	2022
2nd quintile	−0.014 ** (0.007)	−0.007 (0.005)	0.004 (0.006)
3th quintile	−0.014 * (0.009)	−0.016 ** (0.007)	0.002 (0.008)
4th quintile	−0.026 ** (0.010)	−0.007 (0.009)	0.008 (0.010)
5th quintile	−0.025 ** (0.014)	−0.009 (0.011)	0.018 (0.015)

¹ The values in parentheses correspond to the standard error of the estimate of each coefficient. The asterisks indicate the level of significance of the coefficients. A medium level of significance is indicated by two asterisks. A low level of significance is indicated by one asterisk.

, which compares the income quintiles with the quintile with the lowest expenditure for the purchase of powdered milk (Quintile 1), is of greater significance. In fact, in 2018, the coefficients of all quintiles were significant and negative. Nonetheless, households with higher incomes tended to have a lower level of expenditure on this good. Although this pattern persisted, most of the quintile coefficients lost significance in 2020, except for the third quintile, which saw spending fall compared to that in 2018. By 2022, the coefficients were less negative and had little significance, except for Quintile 5, which showed a positive and significant relationship. This finding suggests a potential revaluation process for powdered milk products, which could be indicative of the increased purchasing by higher-income households in the post-pandemic period.

4. Discussion

This study has demonstrated how socioeconomic and regional factors influenced milk consumption decisions in Mexico during the pandemic, reflecting the sensitivity of households to changes in income, family composition, and economic context during and after the pandemic. In this sense, pasteurized milk is regarded as an essential commodity, with higher-income households continuing to demonstrate a preference for it during and after the pandemic [28]. This phenomenon is associated with the observed outcomes. Households with better-educated heads exhibited 29.7% higher expenditure on pasteurized milk than those with uneducated heads [29]. This can be attributed to the established positive correlation between higher educational attainment and higher income, as well as the concomitant reduction in the prevalence of malnutrition. Female-headed households (with women acting as the primary income providers) and families with children exhibited a stronger inclination towards milk consumption. Indeed, households with minor dependents expended between 20.4% and 23.1% more on pasteurized milk.

Conversely, the central-north region, comprising the states of Zacatecas, San Luis Potosí, Guanajuato, and Querétaro, exhibited a decline in pasteurized milk consumption—a trend that persisted after the pandemic. This change coincided with the heightened sensitivity of pasteurized milk consumption to fluctuations in income, with these states being the most impacted by the cessation of manufacturing operations. It was evident that the increase in the consumption of pasteurized milk during the pandemic was attributable to the higher availability of income for the purchase of food items, as opposed to other commodities. In addition, there has been a shift in preferences towards more accessible foods with high nutritional value. On the other hand, an increase in the price of milk could have increased the amount spent on the purchase of goods considered necessary, which would have generated the perception of greater consumption. This final issue was mentioned because of an increase in the price of milk, but it was effectively ruled out because the data used were deflated. Moreover, the consumption of pasteurized milk stabilized in 2022, reaching the level of 2018, despite the increase in price and demand. The consumption of powdered milk was more prevalent in lower-income households and in regions with lower socioeconomic status.

Evidently, during the pandemic, there was an increased perception of powdered milk as a substitute for pasteurized milk. Despite the prevailing perception that this particular milk type possesses enhanced storage and accumulation properties compared to other commodities, its ability to ensure adequate supplies for families during the lockdown was notable. Nevertheless, the pivotal factors were the price and performance of powdered milk, as larger households increase their consumption. Moreover, this trend was also observed in households with children aged under 11. Finally, although all regions exhibited negative elasticity in powdered milk consumption, the southeastern region (Tabasco, Campeche, Yucatán, and Quintana Roo) was notable for its rising consumption. As with the estimates regarding milk, this situation impacted the regions of the country that depend on tourism. This industry was the second most affected by the global pandemic. These results corroborate the conclusions previously established by Berger et al. [9] and McKenzie [8] that, during periods of economic downturn, consumers exhibit a decline in the frequency of their purchasing of non-essential goods. In this manner, priority is given to the purchase of commodities that allow a household to maintain its well-being, whether with lower-cost or higher-yield products. Indeed, as McKenzie [8] observed, during the Tequila Crisis, one of the most severe in modern history, spending on basic foodstuffs increased in low- and high-income households. Consequently, these results substantiate the necessity for low-income households to substitute pasteurized milk with powdered milk to preserve nutritional value and quantity of consumption. By contrast, Chen et al. [30], Baker et al. [10], and Alenxander et al. [31] asserted that the pandemic engendered elevated levels of uncertainty with respect to consumer decision-making. In studies on China and the United States, Chen et al. [30], Alexander et al. [31], and Baker et al. [10] found an increase in spending on food delivered or sold online. However, this was not necessarily accompanied by healthier or more selective consumption. It was clear from their point of view that insecurity and movement restrictions distorted food choices. Ellison et al. [32] and Todd [33] have demonstrated that, during periods of crisis, the cost is not the primary consideration when selecting food; rather, emphasis is placed on quality and nutritional value.

Therefore, it is not surprising that there has been an increase in the consumption of both pasteurized and powdered milk. In this regard, Rodríguez-Salomón et al. [34] found that, prior to the pandemic, milk was considered to be a normal commodity in Mexico. Consequently, in a context characterized by uncertainty, with health being a pivotal consideration, the perception of milk and dairy products as premium commodities is unsurprising. Vera-Vega et al. [35] conducted an analysis in Ecuador that revealed that families who experienced a decline in income began consuming substitute goods in order to maintain their usual nutritional intake. Moreover, Bartik et al. [36] and Feix [6] highlighted that the global pandemic precipitated the loss of millions of jobs and has been responsible for the closure of nearly 50% of small businesses on a global scale. Given that over 70% of jobs in Mexico rely on this type of company, it is unsurprising that the increase in poverty and the loss of purchasing power have become evident [37]. The companies most affected were those dedicated to services and retail sales, so it was evident that the various regions of the country would demonstrate differentiated consumption of pasteurized and powdered milk. In this context, the regions most impacted in terms of income and purchasing power losses included those primarily dependent on tourism, particularly in the south and center of the country. This was attributable to deficiencies in value chains, which are analogous to the challenges experienced by the manufacturing industry. The necessity for this form of analysis is driven by the requirement for micro-level information, which is capable of providing detailed data for the development of social programs aimed at mitigating the negative consequences of income loss, changes in preferences, and alterations in access to supply chains. To achieve this, it is imperative to incorporate a greater number of variables associated with each region. This enables a more precise isolation of the influence of idiosyncratic aspects on consumption decisions. Therefore, further research is required on the consumption of other dairy products by region in the aftermath of the pandemic, as well as the identification of areas where individuals lack access or are in poverty and do not include nutritious foods, such as milk, in their diets.

5. Conclusions

The findings of this study demonstrate that socioeconomic and regional factors significantly influenced the patterns of milk consumption in Mexican households during and after the pandemic. In particular, pasteurized milk maintained its status as an essential good, reflecting its high sensitivity to negative changes in income and household composition. Households with female heads, with a higher level of education, and with young children demonstrated higher levels of pasteurized milk consumption, suggesting a preference for nutritional value and quality. Moreover, the regional analysis indicated that milk-producing regions, such as the west and north-central regions, exhibited higher levels of consumption, albeit with a contraction in the post-pandemic stage. These findings emphasize the significance of the economic and geographical accessibility of dairy products, which could substantiate the necessity of public policies to ensure their availability in the country.

Conversely, the consumption of powdered milk exhibited divergent trends, with higher rates observed in households with lower incomes and in regions characterized by diminished purchasing power. During the pandemic, this category of milk assumed a substitute function, enabling households to maintain access to dairy products despite economic constraints and supply challenges. However, the decline in powdered milk consumption during the post-pandemic period indicates that, once incomes stabilized, families reintroduced pasteurized milk into their diet. In this context, this study confirms that economic crises not only impact the quantity of goods consumed but can also modify the perception of certain products within the basic shopping basket. The hypothesis of negative elasticity of spending on powdered milk in the highest income strata was reinforced by the fact that this product continues to be perceived as an inferior good. Nevertheless, high expectations have been expressed due to the widespread use of the product.