Do healthier food baskets cost more?

This paper uses purchase data from a large representative British household panel to explore the association between the healthiness and cost of food baskets. We classify items purchased that are high in fat, sugar and salt (HFSS) and use the share of calories obtained from these foods to measure the healthiness of the baskets. Our descriptive analysis reveals large variations in the healthiness of food baskets of similar costs. Our empirical results indicate a concave association between the healthiness and cost of food baskets. Buying a basket consisting predominantly of either non-HFSS energy or HFSS energy is likely to be less expensive than a mixed basket, challenging the commonly held view that healthier diets are more expensive than less healthy ones. However, although healthier baskets per se are not more expensive than a healthy basket, the ‘distance’ to move from predominantly HFSS to predominantly non-HFSS may entail increased costs as households move through the ‘mixed basket’ zone. Thus fiscal measures could help them to overcome the cost barriers in improving their diets over the short-term.