Industrial Organization and Experimental Economics
Department of Resource Economics
University of Massachusetts Amherst
Despite the widespread consensus about the societal importance of improving diet quality, there has been limited research aimed at documenting the status of diet quality across the United States and, in particular, its evolution over time. While changes (improvements) in diet quality can be driven either by consumer choice or product availability (or both), a comprehensive assessment of whether (and how) each factor has played a role in the evolution of Americans’ diet quality is particularly lacking. In this paper, we compute an index of diet quality as it pertains to food purchases at retail stores in the United States. Using highly disaggregated (product and geographic) data in two different years (2007 and 2015), we construct the index for both a large sample of households as well as for food purchases at retail stores in each county. For each household (and county) and each year, our index takes into account both the nutritional composition of available products (673,877 barcodes), as well as the volumes purchased. We find a significant improvement in diet quality at the household level as well as at the county level; furthermore, the improvement occurs across all income levels. We then decompose the observed improvement in diet quality into four elements: a) product reformulation, b) product entry, c) product exit, and d) consumer switching. We find that an improvement in the index is solely driven by the three supply factors (reformulation, entry, and exit). We complement these descriptive results with a structural model of demand, which can more precisely separate the role of changing consumer preferences (between 2007 and 2015) vis à vis changes in the environment (prices, product availability and product characteristics). This empirical exercise indicates that between 58% and 70% of the observed improvement in diet quality is due to changes in the environment whereas consumer preferences account for 30% to 42%.
Paper available upon request.
Christian Rojas is a Professor in the Department of Resource Economics at the University of Massachusetts Amherst. His areas of interest include industrial organization and applied econometrics as they related to policy questions such as nutrition, taxation, competition, food, firms’ strategic interaction. He holds a PhD in Economics from Virginia Tech (2005) and his work has been supported by several federal agencies including USDA and NSF.