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Faculty of Economics

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Amano-Patiño, N.

Nutritional Inequality: The Role of Prices, Income, and Preferences

CWPE1909

Abstract: In the U.S., lower income households have a less healthy consumption basket than higher income ones. This paper studies the drivers of such nutrition inequality. I use longitudinal home-scanner data to estimate a demand system on food products, and measure the contribution of prices, disposable income and preferences to nutrition inequality. Disposable income and preferences have a predominant and quantitatively similar role in explaining consumption basket differences across income groups. Instead, prices have a limited effect. Further, I merge nutritional label information to assess, through a series of counterfactual exercises, the effect of income subsidies on nutrition quality. For example, I show that increasing the budget of a low-income household to the average level of the higher income households (a 45% increase in food expenditures) leads to an increase in protein consumption of approximately 5% and a decrease in sugar consumption of approximately 10%.

Keywords: health inequality, grocery demand estimation, food and nutrition policy

JEL Codes: D12 I12 I14 L81 Q18 R20

Author links: Noriko Amano Patino  

PDF: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1909.pdf

Open Access Link: https://doi.org/10.17863/CAM.37450