Celiac Disease, Prices and Consumer Food Choices: Empirical Evidence from the UK

Celiac disease is an autoimmune disease for which the only treatment is a strictly gluten free diet. Prices of gluten free products are higher than common grain-based food. A consumer who must eat only gluten free products can't choose the price he prefers and faces higher prices. The aim of this research is to evaluate the economic impact associated with the higher prices faced by consumers who receive a celiac disease diagnosis. A protocol to collecting price data on gluten and gluten free products was defined. Following the guidelines specified in the data collection proto- col, gluten and gluten free prices were collected considering the on-line shops of the four most important UK supermarkets, and considering all products potentially containing gluten. The resulting dataset allows us to describe the current situation of gluten free food supply both in terms of the range of available product by category and the corresponding prices. Using the 2012 Living Cost and Food Survey data, an Almost Ideal Demand System was estimate. The estimations of the AIDS provide the key informations needed for the evaluation of the impact of coeliac disease. In practice, we consider the price gap between gluten-free foods and foods containing gluten as an implicit tax. The resulting welfare loss of the celiac consumers was then estimated using compensating variation, based on the AIDS coeficients estimated in the previous step and the collected price data. Hence, we estimate the additional amount of food expenditure which is needed by a celiac consumer to reach the same utility level of a consumer whose choice is not restricted to gluten-free products. Demand and welfare analysis was conducted both for the total population and for three different income brackets, in order to explore the relative impact and potential inequalities across income groups.