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The Low Price-Elasticity of Vegetable Consumption

By Matthew Yglesias  

"The Low Price-Elasticity of Vegetable Consumption"

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Ezra Klein has an interesting post primarily focused on the disappointing results of trying to subsidize fruit and vegetable consumption:

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Diansheng Dong and Biing Hwan-Lin recently conducted a study for the USDA’s economic research service modeling the likely impact of a 10 percent discount on fruits and vegetables for low-income Americans (defined here as incomes below 130 percent of the poverty line). They concluded that the policy, which would cost $580 million, would spur low-income Americans to increase their consumption of fruits by 2.1-to-5.2 percent and vegetables by 2.1-to-4.9 percent. It’s not nothing, but it’s not much. The graph below shows the effects of the policy, the effects of the policy doubled (20 percent off fruits and vegetables), and in the final column, how far even the double-subsidy world is from the USDA’s recommended consumption of fruits and vegetables (which is probably still too low!)

One cautionary note about the graphic here would be that actual behavior is so far off from USDA recommended behavior that putting the USDA goals in the chart winds up making the changes very small. If the goal is a 70 percent increase in vegetable consumption, you shouldn’t be surprised that a 20 percent discount doesn’t achieve the goal.

More broadly, though, when discussing this issue it’s important to recall that vegetables are not expensive. I went to the farmer’s market over the weekend and mixed root vegetables (sweet potatoes, carrots, turnips, various kinds of onions and potatoes, etc.) were available for $1 a pound and all these are, needless to say, for sale for less money at a regular supermarket. Indeed, it’s the relative abundance of vegetables that gets us in trouble. Having evolved in an environment where plants are plentiful but meat and sweets and refined grains are rare, we’re programmed to act as if we’ll be eating plenty of vegetables out of necessity and had better grab the other stuff while we have a chance. So any policy to turn these habits around will run into some difficulties as it’s literally going against human nature.

But the bigger issue than price for most people is almost certainly convenience. We’ve created a society where people work longer hours than they used to, where parenting expectations have gotten higher, and where fewer and fewer families have mom serving as a full-time unpaid housekeeper/cook/nanny. Ezra observes that most people “live closer to a McDonald’s than a grocery store.” And, indeed, looking back on it I’ve been struck by how rapid and dramatic the change in my eating habits has been since I moved from being near many takeout food options but far from a grocery store to living closer to a supermarket than a takeout spot.

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On the other hand, Ezra says “taking 10 percent off the price of the rotted bananas at the convenience store won’t do much to encourage their consumption” since they’re still rotten. I’m actually not so sure. Sometimes a store can get into a bad fruit equilibrium, as Sonya’s Market on 11th and Harvard was circa 2003 when I lived nearby. Few people bought the bananas there, so the bananas were rarely fresh, so you didn’t think of Sonya’s as a good place to buy banana’s, so the banana turnover was low and the banana’s were rarely fresh. Conversely, you can achieve a good bodega equilibrium where expectations of high demand lead to fresh produce lead to high levels of consumption which keeps the produce fresh.

Last but by no means least, I don’t think it makes a ton of sense to talk about subsidizing fruits and vegetables without talking first about un-subsidizing corn, soy and the corn ‘n soy derivatives that artificially drive down the price of Fritos and Big Macs. The policy argument for subsidizing healthy eating is convincing enough to me, but obviously is going to fly in the face of widely held anti-paternalist sensibilities. The case against subsidizing unhealthy eating, by contrast, is totally unimpeachable.

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