Questions and answers about coronavirus and the UK economy
Questions and answers about coronavirus and the UK economy

Food for thought

The UK’s National Food Strategy, an independent review commissioned by the government, will report later this year. One key focus is the public health challenge of rising obesity, particularly among children growing up in deprivation, and the implications for policy.

Newsletter from 21 May 2020

When I first started doing research on the food industry, I wasn't that interested in obesity. To me, it didn't seem to be an issue that economists had much to say about. And choosing what to eat felt like a decision that individuals were inherently better placed to make than central government. That was a little over a decade ago. But the more I read about rising obesity (see Our World in Data) and its association with poverty, the more I became convinced that this is one of the big social challenges that we currently face. The high and growing prevalence of obesity among children growing up in deprivation, shown in Monday’s article, is a shocking statistic for a wealthy country.

Figure 1: Children in deprived areas most likely to be obese

Source: NCMP and Child Obesity Profile, Public Health England

Obesity and opportunity

Why is this so alarming? Obesity and associated malnutrition can limit children’s future opportunities, particularly those from disadvantaged backgrounds. Ensuring that all children are well nourished should be a cornerstone of providing equality of opportunity.

Good nutrition is essential for both physical and mental growth. A child that is not well nourished will have difficulty concentrating at school, leading not only to longer-term health problems, but also to poor economic and social outcomes. We know that differences in educational attainment are an important driver of the gap in adult earnings between children growing up in disadvantaged versus affluent families (gov.uk, 2014). So persistently higher obesity in children growing up in deprivation will dampen their future prospects and limit social mobility.

Friday’s article, with Britta Augsburg, Jonathan Cribb, Nahum Locke and Flyn Scott-Reilly, discusses what kinds of economic support government currently provides to poor families with children, how well targeted it is at reducing food poverty, and how these policies might be expanded to reduce food poverty among children.

Poverty and choice

Why do we see many poorer households eating less nutritious diets? A lack of income is clearly one important reason, as discussed by Xiaowei Xu and James Ziliak in Thursday’s article on food insecurity. In both the UK and the United States, food hardship – uncertainty about secure access to food – has risen during the Covid-19 pandemic. As they explain, ‘While the main determinant of food insecurity is low incomes, research suggests that the factors associated with it extend beyond poverty to include income volatility, low formal education or financial planning skills, physical and mental barriers’, and a range of other possible factors.

Work by behavioural economists suggests that being in poverty directly reduces people's ability to make good choices because poverty-related concerns consume their mental resources. This leaves less room for people to consider the information needed to make good choices (Mani et al, 2013). Being poor means coping not just with a shortfall of money, but also with a concurrent shortfall of cognitive resources.

As discussed in the articles posted on Monday and Friday, the poor are ‘less capable not because of inherent traits, but because the very context of poverty imposes load and impedes cognitive capacity. The findings, in other words, are not about poor people, but about any people who find themselves poor.’ Lifting people out of poverty will therefore directly lead to better decision-making.

Advertising and taxes

While alleviating poverty is clearly a key policy objective, government can also do a lot to change the economic signals that people get, as well as the nature of the environment in which they make choices, to try to encourage better ones that are in their own long-term interests.

There is growing evidence that people sometimes give in to temptation and lack self-control. Recent work shows that there is considerable variation in the quality of most individuals’ diets over time, which is likely to be driven by self-control problems in food choice (see Cherchye et al, 2019).

Policies that help people to exert self-control when they want to are one important way that governments can try to support better decision-making. One example of a policy that does this is removing confectionery and treats from the low shelves near checkout counters in supermarkets. Another is to restrict advertising of tempting and unhealthy foods. The impact of such a ban is the focus of another of this week’s articles with Martin O'Connell and Kate Smith.

Advertising for unhealthy foods is widespread on television and booming online, with some studies estimating that children are seeing up to 15.1 billion adverts each year. While restrictions on advertising junk food, soft drinks and sweets may cause companies to compete more in terms of prices, they would still be likely to lower purchases of these unhealthy products.

Figure 2: Expenditure on TV adverts in 2015, by food category

Source: Authors' calculations using AC Nielsen data

Another potential policy is to use ‘corrective’ taxes to increase the price of unhealthy foods relative to healthy alternatives. Tuesday’s piece considered the potential impacts of such taxes, many of which have been implemented around the world. Sugar has been a particular target, in part because it is massively over-consumed by most people.

Figure 3: Sugar consumption compared with recommended maximum, by age

Source: Griffith et al, 2019, Fiscal Studies

A strategy for food

Food is an important part of most people's lives. Not just because of the nutrients it provides but also because it is the centrepiece for much of family life and our social interactions with others. Our preferences and the way we relate to food are formed early in life and often have strong cultural roots.

I was reminded of this in the one of the first projects I did on food choices with Pierre Dubois and Aviv Nevo (2014). It started out as a project to look at why food prices in the UK and France were higher than in the United States: it turns out they aren't. But even more surprising to us were the large differences in the products that were in people's typical shopping baskets.

We were using very comparable large data collected by market research firms. In this globalised world, we expected most of the products that people purchase to be similar across countries, as they are in many consumer markets. But there were huge differences: there wasn't even a category for baked beans in the United States, and I had to send my French colleague a photo of a bottle of Robinsons ‘squash’ because he thought it was a vegetable.

Henry Dimbleby will publish his report on developing a National Food Strategy  later this year. His aims are to set the stage for the government to develop an ambitious plan for policy to tackle the public health problems discussed here, as well as the impact of food production on the environment. At the Economics Observatory, we plan to provide more summaries of research evidence and analysis to inform this national conversation – so watch this space.

Author: Rachel Griffith
Photo by Mae Mu on Unsplash
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