Technical Session 7 Variant of the Cost of Healthy Diet: - PowerPoint Presentation

1. Technical Session 7Variant of the Cost of Healthy Diet:Least cost vs. Preference weightedDr. Anna Herforthwith Kristi Mahrt, Sherman Robinson, Channing Arndt, Derek Headey, IFPRI17 February 20221

2. Least-cost healthy dietMinimum cost needed to meet dietary guidelines.It always provides a balanced diet, but might not be the most preferred foods.2Food groupLeast-cost items in Pakistan in June 2017 Starchy staplesWheat, riceProtein-rich foodsMasoor dal, black gramDairyCurd, fresh unboiled milkFruitsTurbooz, kharboozaVegetablesOnion, eggplant, spinachOilsCooking oilSource: Dizon and Herforth 2018

3. Preference-weighted cost of a healthy dietThe Preference-Weighted Cost of a Healthy Diet (PW) uses all foods for which there are food price observations weighted by their expenditure shares, instead of only least-cost items. Reflects food preferences among the lowest-income consumers, while holding fixed the proportions of food groups to meet dietary guidelines.Can be useful to understand the cost of a more culturally preferable diet – and how much of a premium it has compared to least-cost.3

4. Preference weights are expenditure weightsHold food group proportions fixedWithin food group:LC: selects only 1-3 least-cost items weighted equallyPW: select all items, weighted by expenditure shareLC = Least CostPW = Preference-Weighted4

5. Preference weights are expenditure weightsHold food group proportions fixedWithin food group, instead of selecting only 1-3 least-cost items, select all items, weighted by expenditure share5Food groupFIXED FOR BOTH LC and PWTotal energy content (kcal)number of food items selected for LCnumber of food items selected for PWStarchy staples11722As many as are in the price dataset (~12)Vegetables1303As many as are in the price dataset (~8)Fruits1582As many as are in the price dataset (~6)Animal-source foods2872As many as are in the price dataset (~20)Legumes, nuts & seeds2901As many as are in the price dataset (~5)Oils and fats2921As many as are in the price dataset (~3)

6. Demonstration: how a least-cost healthy diet differs from one incorporating preference weightsSource: ​Herforth, A., Bai, Y., Venkat, A., Mahrt, K., Ebel, A. & Masters, W.A. 2020. Cost and affordability of healthy diets across and within countries. Background paper for The State of Food Security and Nutrition in the World 2020. FAO Agricultural Development Economics Technical Study No. 9. Rome, FAO. https://doi.org/10.4060/cb2431en

7. When healthy diets are unaffordable, food prices are an insurmountable barrier to improved diet quality.Healthy diets(meet food group recommendations)Nutrient adequacy (avoid deficiencies or excesses of essential nutrients)Caloric adequacy(short-term subsistence)When all diets are affordable, food prices are one of many influences on food choice.Source: Food Prices for Nutrition, August 2021Other goals (convenience, preferences)Food prices create a ladder of affordabilityPreference-weighted: Appropriate for poverty linesLeast-cost: Minimum for food securityMistaken for food security

8. Why are we talking about this metric with regard to poverty?Observation: In all countries, the cost of a healthy diet is higher than the poverty line.8

9. Healthy diets by any definition are far more expensive than the entire international poverty line$1.90 (total poverty line)$1.20 (food poverty line)>$3.50 Median cost of 10 guidelinesSource: Herforth et al., 2020, SOFI 2020

10. Why are we talking about this metric with regard to poverty?Observation: In all countries, the cost of a healthy diet is higher than the poverty line.Logic problem.If people cannot afford a healthy diet…aren’t they poor? There are many more poor people than poverty lines suggest.That is, current poverty lines underestimate true poverty.Observation: In most countries, malnutrition rates are higher than poverty rates.The discrepancy is resolved when the food poverty line is based on the cost of a healthy diet.10

11. Food poverty line is based on kcal equivalent of common diet among the poorNeed to allow for the cost of a nutritious/healthy dietNeed to reconsider poverty lines

12. Construction of food poverty lines: Current practice vs. a standard that meets dietary needsCost of Basic Needs approach is typically used for setting food poverty linesIn theory, can be based on whatever is considered a basic need.In practice, only two criteria: (1) calorie adequacy and (2) typical expenditure shares of the poor.Cost of a Healthy Diet – PW retains these two criteria for traditional food poverty linesadds the criteria of meeting FBDGs. Retains the same items the poor usually consume, but in the quantities and proportions that fulfill food group requirements.12

13. Poverty lines could be based on healthy diet costsDietary guidelines could be used to construct poverty lines and safety nets around the cost of a healthy diet -- For example, Myanmar now uses a basic needs poverty line based on actual expenditure shares-- Using least-cost items in each food group to form a healthy diet alters weights, and coincidentally in this case does not alter the overall level-- Using expenditure shares (among the poorest) within food groups would raise diet costs and the level of the poverty lineSource: ​Herforth, A., Bai, Y., Venkat, A., Mahrt, K., Ebel, A. & Masters, W.A. 2020. Cost and affordability of healthy diets across and within countries. Background paper for The State of Food Security and Nutrition in the World 2020. FAO Agricultural Development Economics Technical Study No. 9. Rome, FAO. https://doi.org/10.4060/cb2431en (Least-cost)

14. Existing food poverty line standard, based on consumption patterns of the poor, is very nutritionally deficient.14

15. United States revision to food assistance program benefits (Aug 15, 2021)Updated to meet new U.S. food-based dietary guidelines“For at least a decade, critics of the benefits have said they were too low to provide an adequate diet.”The previous basket “drew on spending data limited to the poor…that created a circular logic — estimating the cost of an adequate diet with data from people who cannot afford one” Approx. $6.90 per day (nominal USD, 2021)Source: The New York Times, 08.15.2021

16. SummaryTo calculate the preference-weighted Cost of a Healthy Diet, the full food list is used, and expenditure weights are needed to weight food items within food groups in fixed proportions.The range between the least-cost and preference-weighted variants may be a realistic range of what poor people would spend to meet dietary guidelines.Also the “preference premium” may be of interest.16

17. SummaryTo calculate the preference-weighted Cost of a Healthy Diet, the full food list is used, and expenditure weights are needed to weight food items within food groups in fixed proportions.The range between the least-cost and preference-weighted variants may be a realistic range of what poor people would spend to meet dietary guidelines.For poverty lines, a revolution in thinking is needed: Nutrition as a Basic Need.Keep using the CBN approach (Cost of Basic Needs)But consider a healthy diet to be a basic need. Recall: “sufficient nutritious food to meet dietary needs and food preferences for an active and healthy life”17

18. Discussion18