Wallace E. Huffman, Sonya K Huffman, Kyrre Rickertsen, Abebayehu Tegene
June 24, 2010
As per capita incomes in developed countries have grown over the past three decades, over-nutrition leading to obesity and elevated health risks for cardiovascular disease, diabetes and some forms of cancer has occurred. We use economic and econometric models to identify the impact of food prices on the aggregate demand for calories and the supply of health, as reflected in mortality rates. Our models are fitted to unique panel data for 18 developed countries over 1971-2001, a period when the relative price of food first rose and then declined steadily. Some findings, using de-trended data, are that a lower real price of food, of other purchased consumer goods and of time increase the demand for calories, one cause of energy imbalance, and the supply of mortality associated with obesity. These prices do not affect the rate of non-obesity-related mortality. Caloric intake is a normal good, contributing to energy imbalance as income increases, but higher incomes do reduce mortality risk. However, higher labor force participation rates, largely associated with rising numbers of working women, and a higher child dependency ratio lead to a higher rate of obesity-related mortality. An implication of our results is that further reductions in the price of food in developed countries can be expected to have a net negative impact on health as reflected in a higher mortality rate due to diseases that are linked to obesitydiabetes, cardiovascular diseases and most forms of cancer.