House Prices, Food Purchases, and Diet Quality

Abstract

Diet is important in determining health outcomes. Thus, it is important to understand the factors influencing dietary choice. Budget constraints are a common explanation for the poor dietary choices made by households in the U.S. We test this hypothesis by exploiting shocks to household budgets driven by changes in house prices. Using a comprehensive panel dataset of household food purchases matched to house price data, we find that household budgets have a positive effect on food expenditure, but find no effect on diet quality. We also find that the total quantity of food purchased increases as budget constraints are relaxed suggesting that changes in quantity is the primary driver of the expenditure change and not changes in prices. Finally, we demonstrate that the impact of budget constraints are larger for lower-income and younger households, while the effect on diet quality remains insignificant. Our results have important policy implications as they suggest that income-support programs, such as SNAP, may have a limited impact on diet quality, although they may increase overall food consumption.

Keywords: Food Consumption; Diet Quality; Budgets; House Prices

JEL Classification: D12; I12; I18