Seminar

Trade in unhealthy foods: Evidence from Mexico

Lorenzo Rotunno (Aix-Marseille School of Economics - GREQAM - Aix-Marseille University)

December 16, 2016, 10:00–11:15

Room MQ 212

Food Economics and Policy Seminar

Abstract

This paper examines the relationship between trade liberalization, consumption of unhealthy foods, and the related health outcomes in the case of Mexico. It empirically assesses the role of food imports from the U.S. in explaining the spectacular rise in obesity and changes in other diet-related health outcomes across Mexican regions since the early 1990s. We combine information from the Mexican health and expenditure household surveys, together with trade and tariff data at the product level. Exploiting variation in expenditure patterns across food products and regions, we find a strong and causal effect of food imports from the U.S. on obesity. The instrumental variable estimates suggest that a one-standard deviation (or 13%) increase of food imports from the US leads to an average 4% increase in the obesity rate across Mexican regions – an effect that is quantitatively comparable to that of a one-year reduction in education. The effect is completely driven by imports of ‘unhealthy’ food products, such as pre-packaged and sugary foods. The paper contributes to our understanding of the risks related to unhealthy eating in a globalised world.