Rates of diet-related disease are increasing across the developed world. Policy makers are exploring different ways to improve individuals’ dietary choices. One of these is to target benefits on the purchase of healthy food, such as fruit and vegetables. The UK Healthy Start scheme, introduced in November 2006, did just that: it distributes vouchers to low-income households with young children, where the vouchers can only be spent on fruit, vegetables and milk. The aim of the scheme was to increase fruit and vegetables spending, but did it work? And if so, who responded to the scheme?
These are the questions we ask in our paper “Getting a Healthy Start? The effectiveness of targeted benefits for improving dietary choices”. We use 'scanner data' of supermarkets to compare low income eligible households’ grocery baskets before and after the introduction of the scheme to low-income ineligible households’ grocery baskets before and after the introduction of the scheme. Eligibility for the vouchers is determined by the age of children: low income households with children aged 0-3, or where the woman is at least three months pregnant, are eligible, whereas low-income households with a woman in the period just before being pregnant or with children aged 4-8 act as a control group of ineligibles. We find that the mean of monthly spending on fresh fruit and vegetables among eligible households increased by approximately £2.43 per month, equivalent to a 15% increase compared to pre-reform levels.
Stephanie von Hinke is a Professor of Health Economics at Erasmus School of Economics. Her main research interests are in the fields of health economics and applied microeconometrics. Stephanie’s research builds on the biomedical as well as social sciences. She investigates the importance of genetics, early life environments, parental investments, and government policy in explaining individuals’ health and well-being over the life course.
The fact that we observe the households' entire food basket allows us to look at the broader effects of the scheme on the nutrient content of foods purchased, as well as at the potential effects of the scheme on purchases of other foodstuffs. Using the same approach, we show that the scheme improved the total nutrient composition of the household shopping basket. We find that levels of fibre, beta-carotene (vitamin A), potassium, iron and zinc increased, while levels of sugar and fat did not change. Furthermore, we find a significant increase in the proportion of households meeting their recommended Reference Intakes for iron and potassium, suggesting an overall improvement in the nutritional content of the shopping basket.
Different outcomes
We next explore who responded to the scheme. For this, there are two predictions. First, standard economic theory predicts that the effect of the vouchers will be greatest for distorted consumers (i.e. those who, in the absence of the vouchers, would spend less than the value of the vouchers on the targeted good). It also predicts that the effect is equivalent to cash for infra-marginal consumers (i.e. those who, in the absence of the vouchers, would spend at least the value of the vouchers on the targeted good).
Second, behavioural theory predicts that all households (whether distorted or inframarginal) are affected similarly. Indeed, some features of the programme might have been expected to affect behaviour beyond the direct economic incentive effects. For example, the actual label of the “Healthy Start” vouchers could signal the importance of healthy eating, in particular of fruit and vegetables. Under this more general behavioural theory, one would expect all households to be affected similarly.
Our analyses, however, shows that the vouchers increased spending only among distorted, not inframarginal, households. Since any behavioural mechanisms would affect all households, while standard economic incentives are stronger for distorted households, the results suggest that these other features did not have an effect in this context, and that the financial incentives provided the main channel through which the benefits worked.
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This item is part of Backbone Magazine 2018. The magazine can be found in E-building or Theil-building for free. Additionally, a digital copy is available here. Backbone is the corporate magazine of Erasmus School of Economics. Since 2014, it is published once a year. The magazine highlights successful and interesting alumni, covers the latest economic trends and research, and reports on news, events, student and alumni accomplishments.
