16.11.2018Talk by Prof. Dr. Noriko Amano Patiño

The Role of Prices, Income, and References

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%.

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