A new approach to quantify the impact of food prices and income on people's eating habits and weight (with Veronika Dolar)

We propose a new measure for food prices to further examine the impact of changes in food prices and real income on individuals' eating decisions and weight. We calculate price per calorie for food consumed away from home and food consumed at home as the dollar amount spent by households on each food category divided by the number of calories consumed. We use our newly constructed time series for price per calorie as an input into a neoclassical model of eating decisions and weight. Our goal is to propose a quantitative explanation for the increase in calories consumed away from home as well as changes in weight for men and women in different age groups between 1971 and 2006. In contrast to previous literature, we find that the impact of changes in food prices and income is quantitatively important as our model accounts for more than seventy percent of the increase in weight for men and women between 1971 and 2006. We also match changes in the fraction of calories consumed away from home well.