When the government caps food prices, do we buy more?

At the 17th International Odyssey Conference on Economics and Business, held in Dubrovnik, Croatia, from 20 to 23 May 2026, Ružica Brečić, Zrinka Lukač and Maja Bogović presented research on the effects of price ceilings introduced by the Government of the Republic of Croatia in September 2022 for selected staple food products, including flour, long-life milk and sunflower oil.

The study started from a simple question: if the government limits the price of a product, will consumers buy more of it? To address this question, the authors analysed actual retail data before and after the introduction of the measure, focusing on changes in prices, sales volumes and revenues.

The results show that price caps did not have the same effect across all products: for some products, lower prices were accompanied by higher sales, while for others this was not the case. This shows why the effects of such measures should be assessed not only through price changes, but also through changes in sales volumes and actual consumer purchasing behaviour.

The research was presented in the conference paper Government Ceiling Prices as a Policy-Induced Exogenous Pricing Shock and provided the basis for a subsequent, expanded analysis of the effects of food price ceilings.

The full conference paper is available here.

The research was conducted within the GAMEHEALTH project, funded by the European Union – NextGenerationEU.