# 1. Introduction

This Working Paper aims to develop a methodology to assess the economic costs of unhealthy diets, which can be particularly informative for agrifood policy. We argue that existing work on the economic cost of malnutrition in all its forms has disadvantages, since several factors other than diet can lead to malnutrition, and even individuals with healthy weights are still at risk of the detrimental health impacts of unhealthy diets.

Our understanding of what constitutes a healthy diet has evolved over time. The early literature on food and nutrition in low- and middle-income countries (LMICs) focused on undernutrition (with low heightfor-age and low weight-for-height of children under five being major concerns). Initially the major focus was adequate energy intake once an early debate over the importance of calories versus protein was resolved. Subsequently attention turned to other dietary components, especially micronutrients. One estimate of the cost of child stunting, which is affected by both energy and micronutrient intakes, suggested that it was associated with an 8% loss of global GDP over the period 1900-2000 (Horton and Steckel 2013), while FAO estimated that chronic undernutrition (referring to child stunting) caused losses of 3.5% of global GDP in the early 21<sup>st</sup> century (FAO, 2013). The 2013 _Lancet_ Maternal and Child Nutrition series estimated that 46% of deaths of children under five were attributable to malnutrition (also referring to undernutrition) (Black et al. 2013).

In the past two decades, however, there has been rising concern about increases in rates of overweight and obesity globally (Popkin 2004), termed the “nutrition transition”, related to unhealthy diets. A large literature discusses the adverse effects of overweight and obesity on health and economic outcomes. While this literature initially focused on impacts in high-income countries, subsequent estimates have also been made for LMICs where the prevalence of overweight and obesity has been rising quickly (Schneider et al. 2020). One recent estimate for 161 countries (comprising high-income countries, as well as LMICs) is that the global economic losses attributable to overweight and obesity amount to 2.2% of global GDP (Okunogbe et al. 2022). The corresponding human cost was estimated at 4.7 million deaths in 2017 (Dai et al. 2020); an update using 2019 data associated this cost with 5 million deaths due to noncommunicable diseases (NCDs), 77% of these occurring in LMICs (Abbafati et al. 2020). Similarly, the World Bank (2020) estimated that 4 million deaths globally were attributable to obesity and projected that by 2035 the costs of obesity in LMICs will amount to $7 trillion.

There is also literature linking dietary factors directly to NCDs (e.g., GBD 2017 Diet Collaborators 2019), with some dietary factors protecting against and others increasing risks of NCDs. GBD 2017 Diet Collaborators (2019) use a bottom-up methodology for each of 15 dietary factors, adding up projected effects and estimating that these dietary risks accounted for 11 million deaths globally in 2017. The effects of some of the dietary risks (e.g., excess consumption of sugar and fat) may be mediated through obesity; while others may operate independently (e.g., GBD 2017 Diet Collaborators, 2019, estimate that 3 million deaths were attributable to excess sodium intake in 2017). Arguably using a more holistic measure of diet quality is preferable to adding up the risks due to multiple individual dietary factors, and less prone to double counting.

Another literature, even broader in scope, ties malnutrition with climate considerations (e.g., The Food and Land Use Coalition – FOLU – 2019). FOLU (2019) presents estimates of the economic costs of, both what they term, undernutrition (stunting, wasting, and underweight among children under five years of age) as 2.0% of global GDP, and of overweight and obesity as 3.1% of global GDP, based on their SYSTEMIQ 2