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.

Methods
These are secondary datasets with information on quantities and prices of purchases fruits and vegetables ("healthy food") and other food ("unhealthy food") by income quantiles of households and US counties. These statistics were calculated from the The NielsenIQ marketing datasets, which can be purchased from the Kilts Center for Marketing at the University of Chicago Booth School of Business.