Fruit and Vegetable Consumption by Low-Income Americans: Would a Price Reduction Make a Difference?
by Diansheng Dong
and Biing-Hwan Lin
Economic Research Report No. (ERR-70) 23 pp, January 2009
Deficiencies exist in Americans' diets. These dietary
deficiencies may contribute to several types of chronic diseases,
which in turn may impose large economic costs on individuals and
society. Dietary deficiencies are worse among low-income Americans.
Many intervention strategies, however, are under consideration by
government and health advocates to improve Americans' diets.
What Is the Issue?
One strategy to encourage low-income Americans to eat more
nutritious diets is for the Government to subsidize the consumption
of healthful foods, such as fruits and vegetables, or tax the
consumption of less healthful foods, such as salty snacks. This
report estimates recent consumption levels of fruits and
vegetables, the effects of a price subsidy for low-income
households on their consumption, and the associated cost.
What Did the Study Find?
American diets continued to fall short of the recommended
consumption levels of fruits and vegetables. On average, Americans
consumed 1.03 cups of fruits and 1.58 cups of vegetables per day in
2004, compared with the recommended 1.80 cups of fruits and 2.60
cups of vegetables. Individuals eligible for benefits through the
Supplemental Nutrition Assistance Program (low income consumers)
ate even smaller amounts of fruits and vegetables-0.96 cup of
fruits and 1.43 cups of vegetables.
Using a range of price elasticities and estimates of food
consumption by low-income Americans, USDA's Economic Research
Service calculated that a 10-percent price discount at the retail
level would encourage low-income households to increase their
consumption of fruits by 2.1 to 5.2 percent (from 0.96 cup to
0.98-1.01 cups) and vegetables by 2.1 to 4.9 percent (from 1.43
cups to 1.46-1.50 cups).
In 2004, low-income households spent $3.91 billion on fruits and
$3.71 billion on vegetables at retail outlets. Discounting the
prices of fruits and vegetables by 10 percent for low-income
households would cost the Government, on average, about $308
million per year for fruits (7.9 percent of recent expenditures on
fruits by low-income Americans) and $274 million for vegetables
(7.4 percent of recent expenditures on vegetables by low-income
How Was the Study Conducted?
A statistical model was estimated and empirical literature
reviewed to obtain a range of demand elasticities for fruits and
vegetables. The statistical model used 2004 Nielsen Homescan data
to estimate consumers' responses to price changes for fruits and
vegetables by income groups. The literature review focused mainly
on recently published journal articles and reports that documented
demand elasticities. The 1999-2002 National Health and Nutrition
Examination Survey (NHANES) data allowed for comparison of food
consumption against the 2005 Federal dietary recommendations and
estimates of food consumed at home and away from home. USDA's
MyPyramid Equivalent Database was used to convert food consumption
reported in NHANES to the unit and food groups specified in the
2005 Dietary Guidelines for Americans. Data from the 2004 Bureau of
Labor Statistics Consumer Expenditure Diary Survey (issued in 2006)
were used to estimate food spending by households of different
income levels. The cost of the price subsidy was derived using
estimates of food spending and demand elasticities. Administrative
costs were not considered.