Trading on Food Quality due to Changes in Prices: Are There Any Nutritional Effects?

The analysis of changes in prices is not only important because they directly affect households' affordability and, therefore, their food security but also because they may trigger changes in the composition of their food and drink choices. Thus, an increase in prices may force a household with limited resources to choose a bundle of goods with lower prices that substitute their original choices and are probably of lower quality. This paper considers the situation of each UK country and the implications that trading down in quality within a food and drink category has on nutrition. Two motivations to pursue these analyses are to explore the sort of substitutions that households do within a category due to an increase in prices and, in the UK leaving the European Union (Brexit) context, the impact that an increase in food prices may have on nutrition. After computing estimates for trading down for each country for the period 2007-2014, we regress the annual rate of change by nutrient with respect to the annual trading in quality for six food qualities that are major contributors of fat, sugar and salt to the diet. The results indicate that trading down in quality occurs in most of the studied categories and countries, and when households trade down, they move to products with worse nutritional quality. This points out the need to keep improving the quality of products through reformulation, ensure that consumers are well informed of nutritional quality of products and monitor the effect of changes in prices.