Rachel Griffith

Professor of Economics, University of Manchester
Research Director, Institute for Fiscal Studies

 

FOODHABITS



I have an ERC Advanced Grant (ERC-ADG-2015-694822) on "Empirical evidence on the formation of habits nad self-control in food choices". The research is carried out in collaboration with many other researchers, in particular Martin O'Connell, Pierre Dubios and Kate Smith.

Governments around the world regard obesity, and particularly child obesity, as a major policy concern. We have made fundamental scientific contributions to better understand the design and effectiveness of policies intended to address this issue. Central to our research are two key considerations. First, many policies are targeted at junk food markets, which tend to be dominated by a small number of firms that heavily advertise their products - this means accounting for how firms may respond to policies is crucial. Second, the costs of poor nutrition are likely to vary across people, and policies will vary in their effectiveness depending on how well they target those for whom costs are highest.

Restrictions to advertising of junk foods is one policy option. In Dubois, Griffith and O'Connell (2018) "The effects of banning advertising in junk food markets" Review of Economic Studies we study the impacts of banning advertising in the U.K. market for potato chips. We show that the effects of advertising on product level demands vary across products and consumers. Advertising of one brand may steal market share from some rival brands, while boosting demand of others; advertising also acts to change consumers' willingness to pay for more healthy products. We simulate the effects of banning advertising on market equilibria, taking account of consumer demand and firm strategic pricing response. We show that banning advertising, holding prices fixed, leads to a reduction in the quantity of potato chips sold of around 15%. However, one effect of advertising on demand is to lower consumer sensitivity to price, reducing the slope of market demands. Therefore, the ban acts to make the market more competitive and firms respond to the ban by, on average, lowering their prices. Lower prices lead to an offsetting increase in demand, meaning, in equilibrium, that the advertising ban lowers the quantity of potato chips sold by around 10%.

Another popular policy is corrective taxation (e.g. on sugary drinks or alcohol) to reduce excess consumption. In Griffith, O'Connell and Smith (2019) "Tax design in the alcohol market" Journal of Public Economics we apply insights from the theoretical literature to a differentiated product setting to show how the optimal design of alcohol taxes depends on the correlation of consumers' product level demands with the social costs that arise from their excess alcohol consumption. We study the empirical importance of this using micro data on the UK market for alcohol, and show that the government can implement better targeted policy by setting higher tax rates on products disproportionately purchased by heavy drinkers.

In ongoing work (Dubois, Griffith and O'Connell, 2019) we apply related ideas to study taxes on sugary drinks. We study whether taxes are effective at lowering sugar consumption for those individuals that policy has targeted, and for whom the consequences of high intake are thought to be most severe, namely young people and those who consume a lot of sugar. We study consumption on-the-go - which accounts for around half of sugar from soft drinks - using novel data on British individuals, including teenagers and young adults. Much of the existing literature focuses only on purchases brought into the home, with children and young adults typically not identified as a distinct group of decision makers within household level data. We estimate consumer choice in the non-alcoholic drinks market and simulate the introduction of a soda tax, accounting for how firms' pass-through the tax to prices. We show that soda taxes do not do a good job at targeting individuals from households with high total dietary sugar, however they are relatively effective at targeting young consumers and those from low income households.

In other work (Griffith, Nesheim and O'Connell, 2018) we show how flexibly modelling consumer demand is important for modelling tax pass through. We compare the effects of a specific and ad valorem tax in reducing consumption of saturated fat. We find that the specific tax more directly targets saturated fat content than the ad valorem tax and has higher pass-through to consumer prices.

The main justification for policy interventions to reduce obesity is that individuals fail to completely account for costs resulting from their food choices. To design policy well it is important to know something about the size of these costs and how they vary across individuals and within individual over time or consumption occasions. A prominent example of such costs are self-control problems that lead individuals to make choices that they later regret. Our research has provided some of the first estimates of self-control problems using large-scale observational data on food purchases (Cherchye, De Rock, Griffith, O'Connell, Smith and Frederic Vermeulen "A new year, a new you? Temptation and self-control in food purchases"). We show that there is considerable evidence that people suffer from self-control problems, that these vary over time with people using periodic occasions to reset their commitment to a healthier diet (most notably new years). We find that younger and lower income individuals suffer from larger self-control problems than older and higher income individuals.

One way for government to improve diet among low-income households is to target benefits on the purchase of healthy food. In Griffith, von Hinke and Smith (2018) "Getting a healthy start: the effectiveness of targeted benefits for improving dietary choices" Journal of Health Economics we study the UK Healthy Start scheme: a large, nationally-implemented scheme that distributes vouchers for specific healthy foods (fruit, vegetables and milk) to low-income households with young children. Standard economic theory predicts that the effect of such vouchers will be greatest for those who would, in the absence of the vouchers, spend less than their value on healthy foods, and will be equivalent to cash for those who would otherwise spend at least the value of the vouchers on healthy foods. We use a discontinuity in eligibility to show that mean monthly expenditure on fresh fruit and vegetable of eligible households increased by 15% compared to pre-reform levels, and the effect of the vouchers is larger than an equivalent-value cash benefit.

Policy impact

Our research has directly informed policy makers and the general public better understand where these concerns are likely to be most important. The impact of this work on the public understanding and policy makers directly is exemplified by:
Martin O'Connell gave evidence to the Health Select Committee on childhood obesity, 1 May 2018
Martin O'Connell gave a presentation on "Using public policy to improve diet" on May 2016 the Scottish Government Strategy Unit Seminar Series
Kate Smith wrote an expert article for the BBC "Will paying more for alcohol and fizzy drinks make us healthier?" 1 May 2018, which explained to a wide non-technical audience how minimum pricing and taxation policies provide different incentives and revenue effects. The piece has been viewed over 650,000 times and is used by the BBC to inform their audiences about ongoing debates on these policies. Following this Kate was invited to present our research at an event in Parliament: "The obesity crisis - lessons for policymakers" - organised by the All Party Parliamentary Group on Social Science and Policy, attended by MPs, Lords and parliamentary researchers
Kate Smith gave oral evidence on minimum unit pricing of alcohol to the Health and Social Care Committee in January 2018
Kate Smith was interview on ITV News at 10, and on Victoria Derbyshire Live (BBC News) on the sugar tax
Martin O'Connell gave a presentation on 'Public policy to lower sugar intake' at the Westminster Food & Nutrition Forum, 27 April 2017
● the team published a large number of non-technical publications via the IFS website including
"Sweetening the sugar tax?" Griffith, O'Connell and Smith, 16 December 2016
"Is the new soft drinks levy well designed?"
"Using taxation to reduce sugar consumption"
"Fixing the UK's alcohol taxes"
"Design of optimal corrective taxes in the UK alcohol market"
"Designing alcohol taxes"
Press release - Proposed 50p minimum unit price for alcohol would increase prices of around 70% of off-trade alcohol purchases. Press release for briefing note on minimum pricing for alcohol.
Martin O'Connell, April 2017, Banning junk food adverts
Martin O'Connell was interviewed on BBC Radio Cornwall and Radio Deveon on 18/12/2017 discussing alcohol minimum unit pricing
"Children's exposure to TV advertising of food and drink", report for Department of Health
"Overexposed to unhealthy ads?" Article published in Understanding Society, ESRC magazine, discussing the potential role of advertising restrictions in combating obesity