Development and expansion of existing food price modelling system

There is a need for Defra to better understand the impact of food price changes on consumers health and welfare, which has become more pressing in light of increasing pressures from modern society. The global impact of the COVID-19 pandemic, the United Kingdom's (UK) exit from the European Union (EU) and the war in the Ukraine has contributed to increased food price volatility in the UK, and November 2022 saw year-on-year food price inflation rise to the highest levels since the 1970s.

This research is likely to consist of the following 6 objectives:

1. To make incremental improvement to the accuracy and usefulness of the current food price modelling systems by using the most updated datasets, provided by Defra, by November 2023.

2. To identify the impact of food price movements on household affordability, health, and welfare through the creation of an analytical model.

3. To analyse the effects of food price movements on consumer behaviour amongst economically and socially disadvantages groups in England.

4. Upon provision of a list of options by Defra, to prioritise possible options for policy interventions targeted at food affordability and accessibility.

5. To produce a variant of the current food price modelling system to analyse the impact of food price drivers in a period of heightened food price volatility.

6. To improve functionality of the modelling system to produce results on sector-led basis, thus improving granularity of data.

Defra is seeking an external research academic or consultancy with econometric expertise to develop a single food price model combining the current food price and elasticities frameworks and expand the research even further to gain an in-depth understanding of what drives food affordability, accounting for the heterogeneity across household types and groups. The model should allow Defra to test different types of scenarios (the 'what if' questions) and measure the impacts of food price inflation (the 'so what' questions) on different household groups. This will help to ensure that the rationale for Government interventions and feasibility of potential policy considerations arising from market failures or inequities will be based on sound and credible evidence.