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Symposium: Sugar and Fat-From Genes to Culture

Fat and Sugar: An Economic Analysis¹

Center for Public Health Nutrition, University of Washington, Seattle, WA 98195

²To whom correspondence should be addressed. E-mail: adamdrew{at}u.washington.edu.

	ABSTRACT

TOP ABSTRACT Energy costs of sugar... Engel’s law and diet... Incomes and diets in... Poverty and obesity Obesity: an economic hypothesis LITERATURE CITED

 
As incomes rise, the share of income spent on food decreases. To Engel’s law should be added the observation that the diet structure changes as well. Incomes and the macronutrient composition of the diet are linked at the aggregate and—most likely—the individual level. People in higher income nations consume more added sugars and fats than do people in lower income nations. Lower income consumers within rich nations consume lower-quality diets than do higher income consumers. The lowering of energy costs ($/MJ) through technological innovation has been most marked for foods containing added sugars and fat. Although wealthier persons in poor nations are more likely to be overweight, obesity in the United States is associated with lower incomes. Obesity in the United States and similar societies may be a socioeconomic, as opposed to a medical, problem and one that is related to diet structure and diet costs.

KEY WORDS: • incomes • diet structure • sugar • fat • energy costs • obesity

Rates of obesity and overweight in the United States have risen sharply over the past two decades (1 ). Because the genetic pool has remained stable, the explanation must involve altered eating habits or the increasingly sedentary lifestyles (2 ,3 ). The sharpest change in diet structure has involved added sugars and fat (4 ). Per capita availability of each has increased by at least 20% since 1977. Nutritionists have blamed the current obesity epidemic on excessive consumption of fast foods, snacks (5 ) and soft drinks (6 –8 ) and the elevated energy density of the U.S. diet. Strategies for obesity prevention increasingly focus on fiscal and policy measures to limit the consumption of fats and sweets (9 ,10 ).

Obesity in the United States is a public health problem with many social and economic antecedents. Far from being a random "genetic lottery," the burden of obesity and diabetes falls disproportionately on minorities and the poor. The economics of food choice may help explain why low income families have the highest rates of overweight. That explanation is based in part on high palatability and low energy cost ($/MJ) of added sugars and fats.

Fats and sweets are among the most palatable of foods (11 ,12 ). Animal studies show that prolonged consumption of fats and sweets may permanently affect the metabolic mechanisms of reward (11 ). Consumer food choices are shaped by taste, cost and convenience (13 ) and are predicted by past food purchases and eating habits. Fats and sweets provided in the form of snacks, beverages or fast foods are palatable, convenient and easy to use. Most important, their energy cost relative to other foods is low (14 ). Fats and sweets can be treated as an example of endogenous preferences in any economic model of consumer behavior.

The notion of endogenous preferences can be difficult to accommodate within the current economic theory. Much of traditional economics is based on the premise that rising prices will lead to decreased demand. The law of demand is behind current suggestions to augment the price of fats and sweets so consumers may allocate their resources toward the purchase of healthier foods (9 ,10 ). However, as suggested later, fats and sweets may prove to be an exception to the rule.

	Energy costs of sugar and fat

TOP ABSTRACT Energy costs of sugar... Engel’s law and diet... Incomes and diets in... Poverty and obesity Obesity: an economic hypothesis LITERATURE CITED

 
Added sugars and fats provide dietary energy at minimal cost. Energy cost ($/10 MJ) of sucrose was $0.23/10 MJ in 1999, given that world prices for refined sugar averaged <$0.10/lb. Technological advances in fat chemistry have reduced energy cost of vegetable oils to $0.50/10 MJ or less (14 ). The lowering of food prices through technology, mentioned as a causal factor in the promotion of obesity (15 ), has been most effective for foods containing added sugars and fat (16 ).

Even though the cost of raw ingredients is rarely linked to retail food prices, energy cost of fats and sweets at the apex of the Food Guide Pyramid is low (16 ). Energy cost of potato chips is in the order of $2.00/10 MJ, and that for soft drinks is $2.20–$3.70/10 MJ. In contrast, energy cost is $9.50/10 MJ for fresh carrots and $14.00/10 MJ for frozen orange juice. This differential in energy costs is compounded by price increases. Retail price increases between 1982 and 1997 were lower for sugar/sweets (52%) and fats and oils (47%) than for vegetables and fruit (93%) (16 ). Not surprisingly, given the hierarchy of food prices, annual per capita consumption of sugar and fat remains near record-high levels (4 ). Added sugars and fats now account for >50% of energy in the typical American diet (4 ).

	Engel’s law and diet structure

TOP ABSTRACT Energy costs of sugar... Engel’s law and diet... Incomes and diets in... Poverty and obesity Obesity: an economic hypothesis LITERATURE CITED

 
Wealth and poverty have profound effects on diet structure, nutrition and health. A law of economics formulated by Engel in 1857 holds that the proportion of income spent on food diminishes as incomes increase. Engel’s law applies to aggregate as well as to individual data. The percentage of personal consumption expenditures spent on at-home foods diminished as per capita gross domestic product (GDP)³ rose (Fig. 1 ). U.S. residents spent the lowest amount (<8%) of disposable income on at-home food, followed by Canada and the United Kingdom (17 ). Among the high income nations, low energy costs were associated with higher energy intakes (Fig. 2 ). Economic Research Service (ERS)/U.S. Department of Agriculture (USDA) analyses of estimated energy intakes and energy costs ($/10 MJ) for high-income nations (GDP <$10,000) show that energy costs were substantially lower for the United States and the United Kingdom ($2.40/10 MJ) than for Japan ($9.40/10 MJ) (17 ).

View larger version (17K): [in this window] [in a new window]   FIGURE 1 Spending on foods at home (as percent of consumption expenditures) in relation to the per capita gross domestic product (GDP) (1993). Data based on Meade and Rosen (17 ).

View larger version (16K): [in this window] [in a new window]   FIGURE 2 Energy costs (U.S. $/1,000 kcal) and estimated per capita energy intakes for high income nations. Data based on Meade and Rosen (17 ).

	Incomes and diets in the United States

TOP ABSTRACT Energy costs of sugar... Engel’s law and diet... Incomes and diets in... Poverty and obesity Obesity: an economic hypothesis LITERATURE CITED

 
Within the United States, rising incomes have been associated with a lower share of food spending at home (16 ). Total percentage share has fallen by more than half since 1950, with spending on at-home foods affected more than spending on other goods. Based on ERS/USDA time trends, Americans spent only 7.4% of disposable income on at-home food in 1998 and an additional 4.2% on away-from-home foods (16 ) (Fig. 3 ). Foods consumed away-from-home are typically higher in fat, sugar and salt than foods prepared and consumed at home.

View larger version (57K): [in this window] [in a new window]   FIGURE 3 Share of income spent on food by U.S. families and individuals for 1929–1998. Data from ERS/USDA.

Consumers spending the highest proportion of disposable income on food (i.e., low income consumers) may also derive most dietary energy from sugar and fat. For low income families, obtaining sufficient dietary energy at low cost is the overwhelming concern. Food Stamp Program (FSP) participants reported that food price was the most important consideration in making food choices and that "the most important factor in choosing and preparing foods was to ensure that no-one would complain they are still hungry" (22 ). Diets of low income consumers for whom food price is the most important consideration may be high in sugars and fat, simply because these are the cheapest sources of dietary energy available.

	Poverty and obesity

TOP ABSTRACT Energy costs of sugar... Engel’s law and diet... Incomes and diets in... Poverty and obesity Obesity: an economic hypothesis LITERATURE CITED

 
Food insufficiency, defined as "sometimes" or "often" not having enough to eat (23 ), has been associated with higher rates of overweight (24 ,25 ). The USDA put forward a behavioral model by which household members faced with diminishing resources first consumed less expensive foods to maintain energy intakes at lower cost (26 ). Only when incomes diminished even further was the amount of energy ration reduced to less than that needed. A proposed "energy-density model" links dietary energy density with food expenditures. A reduction in food expenditures is likely to be associated with higher energy-density diets and with increased consumption of starches, added sugars and fat. Recent studies based on a linear programming model suggest that imposing a constraint on diet costs forces dietary choices in the direction of more cereals, sugars and fat (27 ). Perceived food insecurity may drive consumers toward low cost, energy-dense foods.

	Obesity: an economic hypothesis

TOP ABSTRACT Energy costs of sugar... Engel’s law and diet... Incomes and diets in... Poverty and obesity Obesity: an economic hypothesis LITERATURE CITED

 
Studies on obesity and food choices have stressed the role of physiological and metabolic variables in the consumption of sugar and fat (28 ). Environmental studies have addressed the availability and accessibility of fast foods, snacks and soft drinks, food advertising and food marketing (2 ,5 –9 ). The present economic hypothesis suggests that the low energy cost of refined grains, added sugars and fats may be another key variable. Fats and sweets are the lowest cost dietary option available. Replacing them with more "prudent" food choices is likely to be associated with higher diet costs for the consumer (27 ).

Americans have become more obese as the percentage of fat in the diet declined (28 ). An analogous point can be made with regard to diet costs. Americans are becoming more obese while spending a lower share of disposable income on food (Fig. 4 ). The amount of sugar and fat in the typical diet continues to rise. As primary prevention strategies related to nutrition, obesity and diabetes are put in place, lower socioeconomic groups continue to lag behind (29 ). There is support for the argument that obesity in the United States is not primarily a medical problem and cannot be controlled by primarily medical approaches (30 ).

View larger version (16K): [in this window] [in a new window]   FIGURE 4 Changes in food expenditures (as percentage of income) and the percentage of population that is obese, 1971–1991.

	FOOTNOTES

 
¹ Presented as part of the symposium, "Sugar and Fat-From Genes to Culture," given at the Experimental Biology ’02 meeting in New Orleans, LA, April 23, 2002. This symposium was sponsored by the American Society for Nutritional Sciences and was supported in part by educational grants from ILSI North America and ILSI Research Foundation. Guest editors for this symposium publication were Adam Drewnowski, Center for Public Health Nutrition, University of Washington, Seattle, WA, and Allen Levine, Minnesota Obesity Center, Minneapolis VA Medical Center, Minneapolis, MN.

³ Abbreviations used: ERS, Economic Research Service; GDP, gross domestic product; USDA, U.S. Department of Agriculture.

	LITERATURE CITED

TOP ABSTRACT Energy costs of sugar... Engel’s law and diet... Incomes and diets in... Poverty and obesity Obesity: an economic hypothesis LITERATURE CITED

 

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23. Alaimo, K., Briefel, R. R., Frongillo, E. A. & Olson, C. M. (1998) Food insufficiency exists in the United States: results from the Third National Health and Nutrition Examination Survey (NHANES III). Am. J. Public Health 88:419-426.[Abstract/Free Full Text]

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