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Abstract
Very limited empirical analyses are done on evaluating how changes in the retail
environment affect diet and health status of consumers, especially in developing countries. The
major objective of this study is to shed some light on some of these neglected but crucial issues.
The study examines the impact of supermarket purchases on dietary practices (defined as the
calorie share of different food groups) of Guatemalan households using the 2000 Guatemalan
household survey. I use an instrumental variable method to take into account the potential
endogeneity of the supermarket-purchase variable in the calorie share equations. The
identification strategy relies on two variables: the wife’s occupation (working or housewife) and
the overall socioeconomic development of the community. These variables are highly correlated
with the supermarket-purchase variable but are not correlated with the dietary preferences of
households after controlling for income, education, location, price, and other related variables.
The results of the study reveal that supermarket purchases increase the share that highly and
partially processed food items, such as pastries, cookies, crackers, chocolate, ice cream, and so
forth, make of total calories, at the expense of staple food items such as corn and beans. Since
most processed foods contain disproportionately high amounts of added fat, sugar, and salt, and
since supermarkets are expanding rapidly, different policy measures should be developed to
ensure that supermarkets have a “healthier” impact on diets.