Published on 03-25-2025
There is plenty of evidence that dietary choices, which are closely linked to health outcomes, vary systematically by socioeconomic status. Many of the studies exploring the causes of nutrition disparities attribute them to the absence of healthy grocery stores in disadvantaged neighborhoods, leading to so-called “food deserts.”
A working paper titled “Promoting Healthy Diets at a Large Restaurant Chain” examines nutritional inequality generated from consumer choices of entrées in a restaurant setting, where customers must trade off entrée characteristics against price. The paper is written by Weija (Daisy) Dai, assistant professor of marketing at the Mitch Daniels School of Business; Ginger Jin, Neil Moskowitz Professor of Economics at the University of Maryland; and Ben Zou, associate professor of economics at the Daniels School. The researchers gathered point-of-sales data and entrées’ nutritional information between July 2013 and October 2014 from 287 stores of a national restaurant chain that has locations in neighborhoods with varying socioeconomic conditions.
“We found that on average, people in disadvantaged neighborhoods consumed items that are higher in calories, larger in portion size, and score lower on the Healthy Eating Index than those in more affluent areas,” Dai says. She adds that the disparity is primarily driven by consumer preferences rather than differences in menu offerings or pricing across neighborhoods. In particular, consumer preferences for calorie content are twice as important as healthfulness concerns in explaining the gap in healthy consumption between disadvantaged and affluent neighborhoods.
But there is an opportunity to make change.
“These consumers tend to be more sensitive to price discounts. We found that they were more likely to choose healthier alternatives when the prices on those items were discounted,” she says.
The key is for restaurants to adjust pricing strategically, making healthy items more affordable while raising the prices of less-healthy items, without having to affect their bottom lines.
“It has to be a win-win for both the customers and the business,” Dai explains. “We designed targeted pricing policies that would only be implemented in disadvantaged neighborhoods, with the goal to raise the Healthy Eating Index in these areas to match the levels observed in affluent neighborhoods."
Discounting three popular healthy entrées by a dollar only in disadvantaged neighborhoods, a magnitude of discount the restaurant chain has already occasionally offered in national promotion campaigns, is sufficient to reach this goal. However, such interventions could negatively affect revenue.
Based on consumer price sensitivities and preferences, more sophisticated price adjustments can be implemented across the full menu. The researchers find that with less than a 1 percent price adjustment per entrée, it is possible to eliminate the nutritional gap between neighborhoods while maintaining revenue neutrality.
“We can promote healthier meal choices without having the restaurants suffer on the bottom line,” Dai concludes.
