Reducing Nutritional Disparities Through Targeted Pricing: Evidence from a Large Restaurant Chain

Weijia (Daisy) Dai, Ginger Zhe Jin and Ben Zou

No 33706, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Nutritional disparities across socioeconomic groups contribute to health inequality in the U.S. This paper examines whether practical, firm-led pricing interventions can reduce these disparities by shifting choices toward healthier options among disadvantaged consumers. Using detailed transaction-level data from a large fast-food restaurant chain, we show that consumers in disadvantaged neighborhoods disproportionately select higher-calorie, less healthy items. We exploit quasi-experimental variation from chain-wide promotional discounts to estimate a mixed logit discrete choice model and recover preference heterogeneity across demographic groups. We find that lower-SES consumers are more price-sensitive across all nutritional profiles and exhibit flexibility in substituting between healthy and unhealthy options. Counterfactual simulations demonstrate that modest, targeted price adjustments in disadvantaged neighborhoods can promote healthier eating with minimal impact on revenue.

JEL-codes: D12 I12 I14 L83 R20 (search for similar items in EconPapers)
Date: 2025-04
New Economics Papers: this item is included in nep-agr, nep-dcm and nep-hea
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