We're not going to believe this report, sorry, we're not


We have the latest salvo in the barrage about how bad foods, those ones that we enjoy, must be taxed and those good foods, the ones we don't so much, must be subsidised. That is, tax sugar and carbohydrates, subsidise fruit and veg. The argument today being that the bad foods have fallen relative in price to the good ones sand that this is very bad, not good.

The report’s authors found that fruit and vegetables had risen in price by up to 91 per cent in real terms between 1990 and 2012, a bigger increase than for other any other food group. “In high income countries over the last 30 years it seems that the cost of healthy items in the diet has risen more than that of less healthy options, thereby encouraging diets that lead to excess weight,” said Steve Wiggins, one of the authors of the report.

The report itself is here.

There's a few things being missed. Weight is a function of calories in, calories expended. We don't gain weight simply because we eat cheaper calories. So this cannot be an explanation for rising obesity levels. Further, all food has become cheaper relative to incomes, so if price really is determining what we eat then we might expect the diet to have become healthier. Whatever budget constraints we had on eating that "good" food have still been relaxed, whatever has happened to relative prices.

But perhaps more importantly than this we're not sure that we believe the price indices themselves. They appear to be looking at the prices that people actually pay for the goods, not at prices for a constant form or type or quantity. Thus it's "prices of fruit" or "prices of vegetables" as they appear in the average consumer basket. And there's a few changes in the composition of that consumer basket over those 30 years.

1) Around the year availability of alomst all fruits and vegetables. This is going to make the average price rather more than what it was when we relied upon the local and seasonal gluts. We also get very much more choice of very much more exotic fruits and vegetables and these are, not surprisingly, more expensive as well.

2) The rise of prepared foods. 30 years ago you could not wander into a supermarket and purchase a prepared salad, not a punnet of sliced fruit etc. Now one can and many do. This is obviously more expensive per unit of salad or fruit but we all seem happy enough to pay it.

3) The rise of organic and fair trade. These are both, by design, premium products at premium prices. And while they're not a vast portion of the food market they are significant enough to influence a price index composed in the manner this report seems to.

So, the price index seems to be composed not of what we actually want to know (are apples more expensive than they used to be?) but of what we actually buy (are we buying more expensive foods, of greater variety and exotica, all year rather than seasonally, in a more prepared state?). So we're afraid that we don't actually believe the stated statistic, whatever problems we've got with the theory that they're trying to push.