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Healthy food costs more than double less healthy options

Graham Watson

30th January 2025

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The fact that healthy food, such as fruit and vegetables, costs twice the amount that heavily-processed foods does, has interesting economic implications. The fact that such foods are luxury goods, with a YED greater than 1 shouldn't come as a surprise.

However, it should give cause for concern, not least in the fight against the negative externalities of a bad diet, not least in the form of obesity. It seems to imply that access to healthy options and education to encourage healthier choice have a part to play but might the government go as far as to consider offering vouchers to low-income consumers that are only redeemable for fruit and vegetables?

Other factors to consider might be the availability of healthier options, and the fact that low income families might work longer hours, or be less able to travel longer distances to buy healthier food. I'm not saying that any one of these suggestions is necessarily going to solve the problem; it's clearly multi-faceted.

I'm not even saying that they're all good economics - however, any consideration of appropriate policy solutions would need to evaluate the case for and case against.

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Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to tutor2u, reads voraciously and is interested in all aspects of Teaching and Learning.