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This paper aims to examine impacts of the poverty alleviation relocation (PAR) program on diet quality of low-income households in China. We explore the impact mechanism of relocation on diet quality and the heterogeneous effects of different relocation modes.

A fixed effects model is constructed using panel data of 1126 low-income households collected over three years in eight provinces of China. The PAR program provides a natural experiment which dramatically changes the living conditions surrounding farmers. We are able to identify the causal effects of relocation on diet quality free from selection bias.

The empirical results show that the PAR program improves diet quality of low-income households and that better market access and increasing incomes induced by relocation play an important role in this improvement. Improved market access significantly reduces the over-consumption of staple foods, whereas higher income significantly reduces the intake divergences of non-staple foods. The impacts of different relocation modes on diet quality are highly heterogeneous.

Our findings indicate that the PAR program benefits diet quality of low-income households through greater market access and increases in total household income. Market improvements and food subsidies are conducive to improving the diet quality of the low income.

Despite widespread evidences of healthy diets being associated with household environments and income, selection bias remains. This paper utilizes an exogenous program to explore the causal impacts of market access and family income on diet quality and to separate their different effects.