Steven A. Block and Robel Alemu Fletcher School, Tufts University

1. Where are nutritious diets most expensive?Evidence from 195 foods in 164 countries Steven A. Block and Robel Alemu Fletcher School, Tufts University with Derek Headey Poverty, Health and Nutrition Division, IFPRI Yan Bai and William A. Masters Friedman School of Nutrition & Dept. of Economics, Tufts University https://www.ifpri.org/project/advancing-research-nutrition-and-agriculture-arena https://sites.tufts.edu/candasa ASSA session on Food Markets and Nutrition, 5 January 2019

2. Where are nutritious diets most expensive? motivation | methods |data | results | conclusion How does the cost of nutritious diets differ from overall price levels? Price levels relative to the United States, 2017 (ratio of GDP at 2011 PPP prices to GDP at market exchange rates) US=1.0 Lighter color = lower price level Source: World Bank, from International Comparison Program data (PA.NUS.PPPC.RF).

3. Where are nutritious diets most expensive? motivation | methods |data | results | conclusion Food costs depend on how we definea nutritious diet • Beyond marketing claims, nutritionists focus on • Food groups fruits and vegetables, whole grains, etc. • Profile scores Point systems to classify foods as better/worse • Whole diets attributes needed in moderation, or within thresholds • Here, a “nutritious diet” is combinations with adequate essential nutrients • U.S./Canada Dietary Reference Intake (DRI) requirements for each nutrient • Calorie balance from macronutrients, adequacy for micronutrients • Many economic applications, e.g.: Stigler (1945) idea of least-cost diets leads to linear programming Allen (2017) in AER uses least-cost diets for the cost of subsistence

4. Where are nutritious diets most expensive? motivation | methods |data | results | conclusion Our focus is on the Cost of Nutrient Adequacy (CoNA) • Essential nutrients required for long-term health CoNA = min. { C = Σipi × qi } least-cost combination of foods With:Σiaie × qi  = Edaily energy balance Σiaij × qi ≥ EARj  Est. Avg. Req.for >50% of healthy pop. Updated to address dietary transition: Σiaij × qi ≤ ULj below Upper Limit for excess intake Σiaij × qi ≤ AMDRj,u×E/ej Σiaij × qi ≥ AMDRj,l ×E/ej • Requirements are from U.S. Institute of Medicine (2011) • Baseline is woman 19-30, can adjust for age, sex, preg. & lactation • Baseline is 2000 kcal/day, can adjust for physical activity level • } • and within Acceptable Macronutrient Distribution Range

5. Where are nutritious diets most expensive? motivation | methods |data | results | conclusion Our benchmark for minimal subsistence is the Cost of Caloric Adequacy (CoCA) • Short-term survival mainly depends on daily energy CoCA = min. { C = Σipi × qi } least-cost combination of foods When: Σiaie× qi  = Edaily energy balance Σiaij × qi ≥ EARjsufficient for >50% of healthy pop. Updated to address dietary transition: Σiaij × qi ≤ ULjbelow UL for excess intake Σiaij × qi ≤ AMDRj,u×E/ej Σiaij × qi ≥ AMDRj,l ×E/ej • Comparing CoCA to CoNA shows added cost of nutrients • Elasticity of CoNA with respect to each individual nutrient reveals added cost of reaching that specific constraint • } • within AMDR for macronutrients

6. Where are nutritious diets most expensive? motivation | methods | data | results | conclusion We use ICP prices from 164 countries for 195 standardized food and beverage items ICP price data, by food group (US$/kg in 2011, at PPP exchange rates) ICP aims to compare similar items, so few local foods Prices vary widely, but we use only least-cost sources of nutrients

7. Where are nutritious diets most expensive? motivation | methods | data | results | conclusion Foods included in least-cost dietsvary across national income categories

8. Where are nutritious diets most expensive? motivation | methods | data | results | conclusion The marginal cost of nutrients varies widely(change in CoNA/ percent change in requirement i.e. EAR) Semi-elasticity of CoNA to EAR constraints (US$/pct change)

9. Where are nutritious diets most expensive? motivation | methods | data | results | conclusion Macronutrient balance requires limiting carbohydrates and total fats Semi-elasticity of CoNA to AMDR constraints (US$/pct change)

10. Where are nutritious diets most expensive? motivation | methods | data | results | conclusion CoNA is much higher than CoCA, and varies greatly by region and income CoNA and CoCA by geographic geographic region and income categories Note: Income categories are from the World Bank, geographic regions are as defined in the ICP.

11. Where are nutritious diets most expensive? motivation | methods | data | results | conclusion CoNA varies within regions, even among neighboring countries

12. Where are nutritious diets most expensive? motivation | methods | data | results | conclusion CoNA is linked to agricultural transformation (a productivity-driven shift to off-farm jobs) Agriculture as share of GDP (reverse scale) Agriculture as share of employment (reverse scale)

13. Where are nutritious diets most expensive? motivation | methods | data | results | conclusion CoNA (more than CoCA) is linked to structural transformation into services CoNA CoCA Service sector as share of employment

14. Where are nutritious diets most expensive? motivation | methods | data | results | conclusion How might economic development affect the cost of a nutritious diet? • All results control for national income & ICP region • We focus on agricultural transformation, especially shifting labor and other resources from farm production to off-farm services • If nutritious foods have special post-harvest retail supply chains, then we might see lower prices for nutritious diets with: • More service activity, for specialization and competition; • Greater urbanization, for scale economies in supply chains; • Easier rural transportation and access to electricity; and • Freer international trade, including lower import tariffs

15. Where are nutritious diets most expensive? motivation | methods | data | results | conclusion Diet costs vary non-linearly with income, and have wide dispersion at each level of income Cost of nutrient adequacy in 194 countries, 2011 PPP US$/day

16. Where are nutritious diets most expensive? motivation | methods | data | results | conclusion The premium for nutrients over energy appears to follow an inverted U Premium for nutrients over energy (CoNA-CoCA), US$/day

17. Where are nutritious diets most expensive? motivation | methods | data | results | conclusion Beyond income, CoNA is linked to service sector size, urbanization and rural travel times CoNA is lower at higher incomes, and varies systematically with economic structure (dep var: lnCoNA)

18. Where are nutritious foods most expensive? motivation | methods | data | results | conclusion Beyond income, CoCA is linked to rural travel times and rural electrification CoCA varies with economic development differently than CoNA (dep var: lnCoCA)

19. Where are nutritious foods most expensive? motivation | methods | data | results | conclusion Conclusions and next steps • ICP food prices plus data on nutrient composition and requirements allow us to compute least cost diets in every country, meeting all requirements including upper limits and macronutrient balance • By this metric, people have lower-cost access to a nutritious diet in the richest countries, and in countries with more urbanization and a development path oriented towards a larger service sector • ICP data include only standardized foods & retail shops, so diet cost may be overstated if people can buy nutrients at lower cost from local foods at informal markets • Next steps include adding other prices for more local foods, and testing for links between nutrient cost and nutrient deficiencies

20. Where are nutritious foods most expensive? motivation | methods | data | results | conclusion Thank you! Special thanks to all price enumerators This research is supported primarily by the ARENA project at IFPRI, funded by the Bill & Melinda Gates Foundation as OPP1177007, in collaboration with the CANDASA project at Tufts, funded by UKAid and the Bill & Melinda Gates Foundation as OPP1182628. Software tools will be published on the Gates Open Research platform, and also available on the project website at http://sites.tufts.edu/candasa Photo: Anna Herforth, 2017