High fixed costs for retailing fresh fruit and vegetables means that they cost 40% more than would be efficient, unlike unhealthy alternatives, which trade close to marginal cost, a new study demonstrates.
Introducing a subsidy to counteract the price distortion and reduce the cost of fruit and vegetables will change diets in a way that is not only healthier, but also more in line with what consumers like to eat, according to the research.
Published today (30 March) in Science Advances, the studyby economists at the University of Warwickset out to quantify distortions in the price of fruit and vegetables due to market imperfections, and their impact on our diets.
The economists found that fixed costs in the supply chain play a much larger role in the price of fruit and vegetables than in prices of other foods, distorting the relative price by at least 40%. These high prices imply…