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The prices of unhealthy, calorie-dense foods that contain small amounts of nutrients have become relatively cheaper since 1980. Healthy, nutrient-dense foods that are low in calories have become relatively more expensive during that time. This study analyzes this development and develops an explanation. The main argument is that the actions of the United States government have influenced the relative prices of calories and nutrients. The government provides large amounts of subsidies to farmers. These payments are divided unequally, so that producers of calorie-dense commodities gain more relative to producers of nutrient-dense crops. The government also influences the production mix of land, capital, and labor. Through the tax system, land and capital are forced into the mix at the expense of labor. This hurts producers of nutrient-dense foods, who rely on labor as a main input. The government’s lax regulation of agricultural pollution and greenhouse gases allows agricultural producers to pay less than the full cost of their production processes. Taken together, these factors represent government’s role in making calories relatively cheap and nutrients relatively expensive.
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Wendel, Samuel, "Food Prices: The Relative Price Discrepancies Between Calories and Nutrients" (2012). Senior Projects Spring 2012. 323.