Eating better for less

Since the early 1980s, federal dietary guidelines have urged Americans to eat more nutrient-rich foods and cut back on fatty foods and highly processed “empty calorie” snacks such as cookies and chips. But those pleas have fallen on deaf ears. It's time to start thinking differently about how to encourage Americans to make smarter food choices—and a fine place to start would be cutting the costs of healthy foods in our supermarket aisles.

This is easier said than done. Americans don't enjoy being told to change what they eat. A majority of Americans do not eat enough fruits and vegetables. But we do manage to gulp down lots of so-called discretionary calories, especially added sugars and solid fats.

So how can we help encourage Americans to put down the potato chips and pick up an apple? It turns out that the road to our stomachs may run through our wallets. One important new idea for changing what we eat revolves around changing food pricing and it's being pioneered in South Africa.

Food and agriculture policies have always manipulated prices. For decades, the U.S. government has subsidized efforts to increase agricultural output, no matter what it does to the quality of Americans' diets. The last five-year farm bill, for instance, included $300 billion in spending—but such spending has never been used as a tool to improve the population's nutrition.

For two decades, subsidies to farmers have helped make corn and soy increasingly cheaper than fruit, vegetables and whole grains. Food companies have built entire brands based on these cheaper commodities, which make up the raw material for a range of unhealthy processed foods and animal feed—all at a very real cost to the quality of the calories we consume.

We know that people respond to food-price taxes on fat, sugar or other unhealthy ingredients. The more that food based on such ingredients costs, the less we consume.

But proposals to tax unhealthy foods have been very contentious—and, at least in the U.S., not very successful. Such taxes don't do anything about what consumers may substitute for the newly taxed product. The impact on obesity could be minimal. And the mere mention of taxes on foodstuffs raises the specter of the “nanny state.”

So if Americans don't want to be forced to pay more for unhealthy foods, perhaps we should flip the logic on its head: Reduce the cost of healthy foods.

Would such a program work on a large scale—improving consumers' diets without bankrupting farmers? Fortunately, we have some helpful and encouraging insights from an unexpected place.

For the past four years, South Africa's largest health insurer has operated an innovative program called HealthyFood for its members. Participants receive a 25% rebate on healthy foods (as defined by international dietary guidelines) in 800 supermarkets nationwide. More than 300,000 middle-income South Africans are participating.

So far, the results are compelling. Lowering the costs of healthy foods in supermarkets not only increases the amount of fruits, vegetables and whole grains that people eat, but it also seems to reduce their consumption of less nutritionally desirable foods.

Using data from the grocery clerks' scanners, we estimate that a 25% rebate on healthy foods raises the share of healthier foods that program participants buy by 9%, while cutting the share of less desirable foods they purchase by about 6%.

There's other good news from the South African experiment. Surveys suggest that the price changes altered behavior, too: Consumers reported that they were eating larger amounts of fruits, vegetables and whole-grain foods, and said that they were eating less processed meat and foods high in added sugars, fats or salt. (Unfortunately, we have found no evidence that these new eating patterns reduced obesity rates.)

Overall, the South African program offers encouraging evidence that lowering the cost of healthier foods can motivate people to substantially improve their diets. But behavior changes also seem to be proportional to price changes. When people's actual eating behaviors are far from what nutritionists would recommend, even a 25% price cut can close only a small fraction of the gap.

There is no single cure for America's obesity epidemic, which has deep roots in the social inequality that drives poor people to buy artery-clogging fast food. After all, the least healthy foods are usually the cheapest, the most advertised in poor neighborhoods, and the most available in inner cities—making it far harder to make healthy food choices.

But our work suggests that a combination of things might well slow the obesity epidemic while also improving the American people's overall nutritional well-being: price incentives, initiatives to control portion sizes and a long-term campaign to support better food quality.

Nations such as South Africa are teaching the U.S. and the world a crucial lesson: If we can find ways to get past the resistance to adopting such policies, they could make us all a lot healthier.

Roland Sturm is a senior economist at the not-for-profit, nonpartisan RAND Corp., and Derek Yach is executive director of the Vitality Institute.