A lifelong gluten-free diet is the only available treatment for coeliac disease at present. However, the high price of gluten-free substitute foods is likely to generate a welfare loss for consumers who drop gluten from their diet. Using original data on retail prices in four major UK supermarkets and consumption data from the UK Living Cost and Food Survey, we simulate the welfare change associated to a switch to the gluten-free diet. Within the "Bread and Cereals" category, retail price data show that the average price of gluten-free products is £1.12/100g relative to £ 0.59/100g of gluten-containing products. Our estimates indicate that on average in the UK coeliac consumers have to pay an extra £ 10 per week to maintain their utility levels prior to the dietary switch. This correspond to 29% of the weekly food budget. Results by income quartile are suggestive of regressive effects and the welfare loss for low-income consumers is estimated at 36% of their food budget compared to 24% of high-income consumers.
Keywords: Coeliac disease; Compensating variation; Disparities; Food prices; Welfare.
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