How distorted food prices discourage a healthy diet

Public policy making for the prevention of diet-related disease is impeded
by a lack of evidence on whether poor diets are a matter of personal
responsibility or a choice set narrowed by environmental conditions. An
important element of the environment is market imperfections in food
retail that distort prices. We use a rich dataset on quantities and prices
of food purchases in the United States and a structural model of dietary
choices to examine variation in diets across households that have
different levels of income and live in different neighborhoods. We find
that price distortions account for one-third of the gap between the
recommended and actual intake of fruits and vegetables. A feasible fiscal
intervention that remedies these distortions makes all consumers better
off.