The Demand for School Lunches: Price Effects and Peer Effects

Every day, almost 300,000 children in the UK from low income households do not participate in a welfare programme to which they are entitled: Free School Meals (FSMs). This paper uses an administrative dataset which is aggregated at the school level to model participation in FSMs incorporating endogenous peer effects in consumption. Increasing take-up of school lunches among those usually required to pay causes a modest increase in participation in free school meals. This occurs by raising the probability that an FSM-participant can eat with his friends, and by signalling that school lunches are a desirable choice. It is argued that the greatest welfare improvements can be made by similar interventions targeted at the most deprived schools, rather than the most deprived individuals.

The paper can be downloaded below.