Thursday 29 August 2013

The Jamie Oliver School of Economics



The habit of reducing complicated economic problems into simple- and unfortunately, rather venemous- observational analysis, is something most people have found themselves doing at least once in their lifetime.

TV chef Jamie Oliver found himself in the firing line, after claiming that many people from poor/ low-income families often turn to 'convenience' foods over healthy, natural options. But to quote his statement in the Radio Times;

"I’m not judgmental but I’ve spent a lot of time in poor communities and I find it quite hard to talk about modern-day poverty,’ the 38-year-old said.

‘You might remember that scene in Ministry Of Food [his television show], with the mum and kid eating chips and cheese out of Styrofoam containers and behind them is a massive f***ing TV. It just didn’t weigh up."



The gist of the statement actually poses an economic problem, regarding income and expenditure:


why do people on low incomes spend higher % of weekly earning on prepared, or convenience foods with high premiums?

Jamie Oliver is right in his general argument- healthy diet options do work out cheaper in the long term compared to convenience diets in real terms. This paper presents quite an interesting model that accounts value in terms of cost per calorie, estimating that the cost of convenience food diets are 52% higher than healthy options.

But as a whole, this isn't too different from aggregate consumption patterns. The government's own statistics via the Family Food Survey 2012 indicate that while families had increased their food consumption by 1.5%, this didn't necessarily translate into buying more food, than it did the price of basic ingredients rising. But as the Joseph Rowntree Foundation noted- the rise in expenditure for low income families went from 15.2- 16.6%; some of which went to 'trading down' ; ie. Spending more on lower quality, prepared foods over higher priced fruits and vegetables.

The second point- something which many commentators often forget, is that the means in which people purchase and consume food isn't black and white. Statements such as "if you're poor, then why buy expensive foods?", while being convenient to ask, don't hold a lot of weight in the real world because it ignores the reason why people eat in the first place. It sounds pretty obvious, but when eating, we make choices before, during and after- and much of that is rooted in ideas beyond models of economic rationality.

The health economists Drewnowski and Specter (2004) posit a hypothesis arguing that health inequalities are directly linked to disparities in terms of both education and income. they argue that in purchasing food there is:

"an inverse relation between energy density (MJ/kg) and energy cost (US dollars/MJ), such that energy-dense foods composed of refined grains, added sugars, or fats may represent the lowest-cost option to the consumer"

While no such study seems to be available in Britain, it's not unfeasible that we'd probably see a similar pattern; ie. fully broken down, junk foods with high energy do work out to be more cost-effective in the long term. In families with few resources, making these types of consumption decisions might be more likely on the basis that high-energy foods (such as ready meals) market themselves as instant sources of good nourishment- making the additional costs added onto the meals appear more valuable

Dr.Burns' hypothesis of 'food anxiety' is also important here- consuming food isn't just an economic process- it's a visual one too. So when we ask ourselves about the relationship between obesity and low income, the idea of 'food anxiety' is quite a powerful concept- not least because it conveys psychological states. One part of the argument suggests that ready meal/fast food options also give off the image that longer-lasting produce such as vegetables, fruits and staple foods can be saved for later, presenting the idea that this arrangement is more cost-effective in the long term.

The literature review attached to Burns' paper indicates that obesity does have a link to poverty through decisions made while in a state of 'food anxiety'. So while Oliver might be right in a numerically, the fact that most consumers don't purchase their groceries with only efficiency in mind makes the argument a bit disingenuous, especially when branding a section of the population.

In that sense, I do believe that Oliver's efforts- to show that good food can be made easily, at a low cost, are commendable. It's just a shame he had to fire crass generalisations beforehand.

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