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Food deserts and location economics

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Abstract

People who must travel more than one mile to purchase fresh and healthy food are defined by the US Department of Agriculture as living in a ‘food desert’. An extensive literature has evolved on the subject, but it lacks an economic model or empirical evidence to explain food deserts. This paper estimates an economic location model to explain the occurrence of 4066 ‘food desert’ census tracts in 363 urban areas. The model determines the radius of a circular market area of the smallest profitable supermarket in each area, based on shoppers’ travel cost, household food purchases, and supermarket fixed costs. The model parameters are estimated for each urban area, and the mean radius is 3.25 miles, which suggests the present food deserts one mile definition is not well-grounded since the average distance in a circular market is 2/3 its radius. The number of food desert census tracts is very sensitive to the market size radius of the smallest supermarkets, with an elasticity of − 4.17, and the presence of a Walmart increases the count of food deserts by 20.

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Notes

  1. A Google Scholar search of ‘Food Deserts’ on October 15, 2021 returned 16,900 references.

  2. Allcott et al. (2019) conduct a detailed investigation of the relationship between food deserts and nutritional inequality and note that “…our results do allow us to conclude that policies aimed at eliminating food deserts likely generate little progress toward a goal of reducing nutritional inequality (p. 1840).” This suggests that even trying to eliminate food deserts may not be justified.

  3. 2012 is the year that the USDA conducted its national Food Access Purchase Survey.

  4. Food retailing is an old-fashioned industry and the ‘new geography’ focus on entrepreneurship, high-technology startups and agglomeration effects offers little insight into the ‘food deserts’ question.

  5. Betancourt and Malanoski (op. cit.) find constant marginal cost with respect to output (transactions) and declining marginal cost with respect to services (e.g., bagging).

  6. Profit maximization requires -1/2t(πDU)(m – k) + πDU2 = 0.

  7. Capozza and Attaran (1976) also show that in this type of model the mill price is an increasing function of F, k and t, which also comports with non-spatial economic models.

  8. The area of a hexagon is 2.6S2, where S is the length of one side of the hexagon and is 1.15 times as long as its radius or apothem which is the same as the radius of the inscribed circle. Average distance = 0.6079S (Stone, 1991).

  9. Thus, m + q dm/dq = k, and m = F/q + k. The number of firms is denoted N and q = D/N ≡ Q/N; dm/dq = dU/dq∙dm/dU = -2t/πDU.

  10. FoodAPS also surveyed rural households, but they are not included in the present study.

  11. All Other trips include small (11), medium (60) and large (70) grocery stores, 35 Dollar Stores, and 9 Convenience Store. The remaining trips include drug stores, farmer markets, and military shops and not specified.

  12. A Super Store is defined as a large footprint supermarket. A supermarket is a full-line, self-service stores with annual sales of at least $2 million. A Club or warehouse store usually requires a membership fee and stacks merchandise on pallets or racks, rather than shelves.

  13. About 6% of respondents did not provide income data, and the amount recorded is imputed by FAPS.

  14. The publicly available FoodAPS data do not give the location below the level of region.

  15. The mean number of transaction per week per square mile is 415. Annual data are converted to weekly because store fixed costs are weekly amounts.

  16. The instrumental variables are the same used in Table 4.

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  1. Rensselaer Polytechnic Institute, 23 Kester Lane, Troy, NY, 12180-6516, USA

    Donald F. Vitaliano

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  1. Donald F. Vitaliano
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Vitaliano, D.F. Food deserts and location economics. SN Bus Econ 2, 21 (2022). https://doi.org/10.1007/s43546-021-00183-1

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