Monday, August 1, 2011

Cheap and fat (17 Sept 2009)

Vox EU posted a study by Neil Gandal about the relationship of obesity to price sensitivity.
Is increasing obesity due to changes in relative food prices? High-energy density foods are less expensive per calorie than fresh fruits and vegetables. Using data from Israel, this column shows that price sensitivity has a significant impact on obesity. In fact, price sensitivity may be more crucial than income.... We find that women who stated that price was not important at all when purchasing food products had a BMI 1.3 units below those who stated that price was “very important.” A reduction of 1.3 units in the BMI for all obese women would move approximately 25% of women who are in the "obese" category to the "overweight" category.
In other words, according to this study, people who are cost-conscious while buying food tend to be fatter, even after controlling for income. (So perhaps commentators should be careful about reflexively linking poor and fat together; fat and cheap is the proper knee-jerk insult combo.) It seems to suggest by implication, too, that being poor doesn't necessarily make you more cost-conscious about food, which seems a bit hard to believe. Perhaps you don't self-report as "cost-conscious" when you can't choose to spend more on food even if you wanted to.

Eating badly can seem like an ignorant thing to do, and conservative types tend to assume that the poor are poor because they are ignorant as well. So it seems to make ideological sense to them that the poor make bad eating choices out of the same supposed myopic ignorance that has made them "choose" poverty. They aren't forced by straitened circumstances to eat unhealthy food; they choose it. The study could be distorted to support that view. But the study also would seem to suggest that some of the wisdom and economic common sense that the poor are sometimes presumed to lack -- being more rational in the marketplace, finding good deals, being thrifty, etc. (the imprudence that allegedly keeps them poor) -- is precisely what's correlated with the unhealthy eating, that bargain hunting and obesity stem from the same miser pathology. What's clear is that the rationale of the market wreaks havoc on whatever our body might otherwise tell us about what we need nutritionally. We make market-based decisions about what body needs, letting the market dictate those needs, to our body's detriment.

The context for the study is the proposition of taxes on sugar drinks. Gandal notes that "Drewnowski and Barratt-Fornell (2004) conducted a simple "experiment" in a Seattle supermarket and found that, per calorie, carrots cost virtually five times more than cookies or potato chips, and orange juice costs virtually five times as much as soft drinks." One of the reasons for this, as Michael Pollan has argued and as Gandal notes, is U.S. agricultural policy:
Between 1985 and 2000, fruit and vegetable prices in the US increased by about 40%, while the price of soft drinks dropped by 23%. These seem like large changes in relative prices. According to Pollan, the change in relative prices is in large part due to the US farm bill, which provides generous subsidies for corn and soy, which are prime ingredients in high-density “processed food.”

The Economist's Free Exchange blogger puts the findings in perspective and makes a good point: the U.S. should take on the irrational agri-subsidies first before levying nanny-ish taxes on unhealthful consumer behavior.

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