has set for itself—changing American’s diets—is extremely difficult. Here, we offer a
quantitative perspective on just how difficult it will be to realize a substantial improvement. We
focus attention on the subset of consumers who have strong incentives to choose a healthful diet,
those who have been diagnosed with diabetes, and show that they embrace opportunities to resist
any change.
In this paper, we first provide some background on diabetes in the United States, indicating how
diet and risk preferences could lead to a variety of behavioral adjustments and concomitant
health (or health risk) outcomes. We offer a theoretical model that shows that if consumers treat
diet and medication as substitutes in producing good health, consumers are unlikely to realize all
the health benefits possible from diet and medication. In fact, consumers may choose diets that
pose health risks even larger than those incurred in undiagnosed states: diet quality for those on
medication may be worse than those who do not have diet-related chronic diseases. This study
uses the most recent data sets from the National Health and Nutrition Examination Survey 1999-
2000 and 2001-2002 (for simplicity NHANES 1999-2002), which contain detailed information
on dietary intake, medical conditions and whether an individual takes medication for such
conditions. We estimate how differences in dietary quality correlate with whether or not an
individual has been diagnosed with diabetes, and whether or not an individual uses medication to
manage his or her health condition. By examining diet quality for those having a diet-related
disease, we show that the threat of severe adverse health consequences (premature death,
blindness, loss of limbs, kidney failure) can induce major improvements in diet quality
(improvements from the perspective of the public health community, not consumers). But the
availability of medications that can also forestall the adverse health consequences of chronic
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