The Economics of the Thrifty Food Plan

Year: 2008

Research Center: The Harris School of Public Policy Studies, University of Chicago

Investigator: Wilde, Parke E., and Joseph Llobrera

Institution: Tufts University

Project Contact:
Parke Wilde
Friedman School of Nutrition Science and Policy
Tufts University
150 Harrison Ave.
Boston, MA 02111
Phone: 617-636-3495


The cost of a nutritious diet is a central question in U.S. antihunger and nutrition policy. The benefit level for more than 28 million low-income participants in the Supplemental Nutrition Assistance Program (SNAP), formerly called the Food Stamp Program, is related to the Federal Government’s official estimate of the cost of a “thrifty” but nutritionally adequate food plan. One leading explanation for the current epidemic of obesity-related chronic disease emphasizes the comparatively low cost of energy-dense foods and the high cost of healthier foods. The USDA’s Thrifty Food Plan (TFP), revised most recently in 2006, offers a useful framework for studying the cost of a nutritious diet.

The TFP framework uses the similarity between a proposed food plan and the average current food consumption pattern as a way of quantifying the likely palatability or consumer acceptability of the proposed plan. USDA generates the TFP by solving a constrained optimization problem, choosing a diet composed of quantities for 59 food groups. The chosen quantities are as similar as possible to the current consumption pattern for low-income Americans, while simultaneously meeting a cost constraint, food group constraints drawn from the MyPyramid nutrition education materials, nutrient constraints from the Dietary Guidelines for Americans, and other miscellaneous constraints. The objective function minimizes the “distance” between a proposed food plan and the current average consumption pattern for low-income Americans. This distance function is a weighted sum of the “distance contributions” from each of the 59 food groups.

In this study, the TFP framework was adapted or extended in three ways. First, USDA’s constrained optimization problem was compared with the theory of constrained utility maximization more familiar in consumer economics. In addition to the objective function from the official 2006 TFP, three alternative specifications that make the objective function more similar to a utility function were explored. Second, instead of imposing a fixed-cost constraint, a wide range of cost constraints was studied, showing how the difficulty of achieving a healthy diet changed systematically as the cost constraint tightened. Third, to investigate how the cost depends systematically on the definition of “nutritious,” the effects of the different kinds of nutrition constraints were disentangled.

In addition to the quantitative analysis, an Excel-based spreadsheet program was developed, allowing lay audiences more easily to understand the official USDA food plans or to create a new benchmark food plan that meets their own chosen nutrition policy goals.

When “nutritious” was defined as meeting food energy requirements plus the MyPyramid recommendations for food categories, a low-cost diet necessarily deviated substantially from current consumption. To meet the MyPyramid food category constraints, the model increased the amount of low-fat milk, whole grain rice and pasta, fruits and fruit juice, vegetables, nuts, seeds, and legumes. At the same time, the model reduced the amount of food groups like coffee and soft drinks, which do not belong to the five main MyPyramid food categories and contribute to added fats and sugars. To stay within the cost constraint, the model substituted lower cost food groups for higher cost food groups within each MyPyramid food category. This food plan did well in terms of meeting most other nutrient targets, even though the nutrient constraints were not imposed on the model. The food plan met the macronutrient targets for fat, carbohydrates, and protein. It also met all the micronutrient targets included in this analysis except for linolenic acid, iron, potassium, and vitamin E.

Alternatively, when “nutritious” was defined in terms of food energy plus nutrient constraints, instead of MyPyramid food categories, a low-cost solution remained closer to the current consumption bundle. The recommended ranges for macronutrients, such as carbohydrates and protein, were easily satisfied, but the constraints were binding for many other nutrients, including calcium, iron, potassium, vitamin E, and vitamin A. The model satisfied these requirements by increasing the amount for food groups that are rich sources of these specific nutrients. This plan reduced the amount of such food groups as regular soft drinks, sugars, fats, and oils, which contribute to energy but not to nutrient content. While meeting nutrient targets, this plan did not satisfy some MyPyramid food category targets. For example, it satisfied the protein and iron requirements using less than the MyPyramid recommendation for the meat group, and it satisfied the calcium requirement using less than the MyPyramid recommendation for the dairy group.

Within the TFP framework, the estimated cost of a nutritious diet depends on the definition of “nutritious” and also on what amount of difference is tolerated between a proposed food plan and the current average consumption pattern. The current official cost target, which is related to the maximum benefit level in SNAP, appears adequate if one defines “nutritious” in terms of nutrients rather than MyPyramid food categories or if one tolerates a high degree of difference between the proposed plan and current consumption. However, if one defines “nutritious” to include both nutrient constraints and MyPyramid food category amounts, while expecting the proposed food plan to be similar to current consumption for reasons of palatability, then the estimates indicate that a higher food cost allowance would be needed.

Direct inquiries about this study to the Project Contact listed above.