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The Falling Price of Food

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There’s an interesting conversation between Darius Lakdawalla and Carol Graham over at the Wall Street Journal’s Econoblog [2] on why Americans are getting fatter over time An excerpt from Lakdawalla’s opening comment:

Since 1976, food has fallen in price by more than 12%
compared to other goods. My colleague Tomas Philipson and I have shown
that this reduction in price can explain at least half the recent growth in obesity [3].
Shin-Yi Chou, Michael Grossman and Henry Saffer reached similar
conclusions about the importance of price. In addition to its overall
price, they stressed the increasing availability of food service establishments [4].

While it is not entirely clear whether restaurants
make people heavier, or heavier people attract more restaurants, there
is no question that eating is cheaper and easier than it used to be.

As if that were not enough, the most calorie-dense
foods have seen the biggest price reductions. David Cutler, Edward
Glaeser, and Jesse Shapiro have shown that technological advances have especially lowered the price of processed and snack foods [5]  — like french fries and vending machine treats — which are particularly high in calories.

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