Food Choice And Health: The Role Of Economic Factors
Published on 23 October 2009 in Sustainability and Communities , Food, health and wellbeing
Introduction
Since 1957, using the classification of the Food Expenditure Survey (FES), the proportion of the average weekly expenditure spent on food and non-alcoholic drinks has decreased from 33% to 16% in 2006 (the same percentage was registered in 2007). Even if one considers the share of food and non-alcoholic drinks on the total expenditure of the poorer gross income decile, (according to the Classification of Individual Consumption by Purpose) in 2007 it was 14% while the average for the UK was 10%.
These figures may give the impression that food has become a minor expenditure in the family budget and therefore, what happens within the group (i.e., the allocation of the budget to the different food categories) is something of marginal importance. However, any significant changes in the nation's diet due to factors affecting food choice can have an adverse impact on the population's health (hence the implications for public heath policy). Factors that influence quality of food consumed and overall nutritional balance are therefore important not only to the Government and its institutions but also as reflected in the discussion of the National Food Policy for Scotland also for other food sector stakeholders.
The relatively recent rise in food prices raised interest in the food choice and composition of the nation’s food basket, especially in the context of the formulation of the National Food Policy for Scotland. Modelling changes in prices and income (particularly important during a recession) and their effect on the demand for specific products (e.g., healthy products) provides an insight into the composition of consumers’ baskets (i.e., what mix of products are in the basket and how products are substituted when their prices change). Such analysis can also include identification of differences in food price sensitivity amongst different socio-economic groups or regions. Furthermore, it is important to point out that when analysing prices, a broad approach has to be applied to include the effect of promotions (e.g., two products for the price of one) or any other marketing strategy that reduces the price per unit of product.
Key Points
Several studies have been conducted to establish the effect that economic factors such as prices and income may have on consumers’ behaviour. The results indicate that:
• Consumers have their purchasing power affected due to the rise in food prices, but the extent of welfare loss is dependent on the income level and the prices of other goods and services. Next to food, housing and energy are other important expenditure items.
• Regarding the distributional impact of inflation, the 1st income decile (the poorest) has been the hardest hit with respect to inflation (especially food) and it is the one with the lowest income growth rate, which makes it vulnerable to future price rises. This may have an adverse impact on diet quality in this group as several studies have shown that poorer socio-economic groups tend to have worse nutritional patterns and be more sensitive to price rises.
• The estimation of the demand response to price changes shows that for several of the selected food categories, the rise in price has brought an increase in consumer expenditure (i.e., the decrease in the quantities has not outweighed the rise in prices). This is the case for brown bread, milk in all the analysed types, and eggs. The opposite case was observed in the case of white bread, fresh new potatoes, minced beef, and whole fresh chicken. In addition, all the studied products respond to changes in income, in other terms, changes in income (e.g., during periods of recession) may have an impact on the quality or quantity purchased of different goods (e.g., increase their consumption of cheaper fast food).
• The work on bread purchases indicates that the responses to price changes by regional and socio-economic groups are close to the Scottish average. The results also suggest that price changes are likely to affect the composition of the food basket.
• Purchases of fresh and processed red meat amongst different socio-economic and regional groups are also following overall Scottish patterns.
• A case study on the purchases of the top 10 sausages in Scotland indicated that there is room to move the purchases of sausages towards a more healthy (less sodium or less saturated fat) product without necessarily incurring an increase in customer expenditure. However to improve quality of sausages bought and at the same time aim to achieve decrease the total expenditure for this product category may be more challenging, if not impossible.
Research Undertaken
Several projects have been undertaken on food and health in Scotland from an investigation of consumers’ opinions to the estimation of economic demand models. However, it is important to highlight that these studies were completed only for selected categories of food products. In addition, most of this work had the National Food Policy for Scotland or food prices increase focus:
- The Future for Food in Scotland: Analysis of Responses to the National Discussion
- Assessing the Effect of the Rise in Food Prices on the Purchasing Power of Consumers in Scotland
- An Exploration of the Use of a Dataset of Supermarket Purchases for the Analysis of Red Meat Purchases in Scotland.
- Cereal Prices, Bread Consumption and Health in Scotland.
- Use of Supermarket Scanner Data to Measure Bread Consumption and Nutrition Choice in Scotland.
Policy Implications
The results of these investigations can be summarised in relation to the present and future policy changes and its implementation:
• Although there are individual differences in stakeholders’ interests, overall all parties interested in the National Food Policy appreciate the importance of balanced nutrition and access to affordable and quality food. Education and health issues have to feature strongly in the policy instruments aiming to improve eating patterns and affordability of food.
• For the policy makers to develop both robust and effective policies and their instruments an understanding of consumers’ choices is crucial but, due to its complex nature, it requires application of different disciplines in research and interpretation of its results.
• Multiple market factors have an impact on the food choice and therefore influence the health of the nation. Amongst market factors, food price changes are one of the most prominent influences (including sales promotions); however, the price levels interact with other factors and further analysis of the purchase context should be performed (e.g., impact of advertising on food choice).
• There are specific conclusions related to individual product categories i.e. :
Given the fact that the 2003 Scottish Health survey indicated that the consumption of bread in Scotland was not reaching the recommended levels, the recent rise in cereal and bread prices might have made this even more challenging. Given the nutritional importance of bread consumption and its relationship with several illnesses, it may call for specifically targeted policy to achieve desired levels of consumption and prevent health problems.
The investigation of red meat purchases indicates that targeting particular consumer groups may not be the most efficient way to improve nutritional intakes of the population. Instead, it may be potentially more effective to engage with producers, suppliers and retailers directly to improve the nutritional composition of specific products.
• Separate issues identified in multiple research projects relate to the provision of clear and accessible nutritional information on individual products. An access to clear and understandable product and consumption data is required for customers to make an informed choice between similar products. This is on the other hand a necessary condition for support of healthy choices at the point of sale and later on during food preparation at home.
Author
Cesar Revoredo-Giha & Beata Kupiec-Teahan cesar.revoredo@sac.ac.uk ; beata.kupiec@sac.ac.uk
Topics
Sustainability and Communities , Food, health and wellbeing
