IDEAS home Printed from https://ideas.repec.org/a/eee/jfpoli/v75y2018icp158-170.html
   My bibliography  Save this article

Store profitability and public policies to improve food access in non-metro U.S. counties

Author

Listed:
  • Cleary, Rebecca
  • Bonanno, Alessandro
  • Chenarides, Lauren
  • Goetz, Stephan J.

Abstract

Access to affordable and nutritious food is a widely-debated public policy issue in the U.S. In non-metro (including semi-urban and rural) U.S. areas, poor food access is mostly the result of lack of food stores, and in particular the absence of large ones (e.g., full-line groceries or superstores). Any policy designed to improve food access in non-metro U.S. areas should recognize that improving stores’ profitability is crucial to policy success in the long-run. We adapt an empirical entry model to assess the effectiveness of two types of policies to improve food access – demand-stimulating policies (DSP), such as increases in Supplemental Nutrition Assistance Program dollars, and supply-side policies (SSP), such as subsidies to reduce establishment costs – by estimating the minimum market size needed for one or more large food stores in non-metro U.S. counties to be profitable. We find that neither type of intervention is preferred a priori and that the cost-effectiveness of each policy type depends upon the presence of an adjacent metropolitan county, the number of pre-existing stores, and the duration of the demand-side stimuli. Additionally, our results suggest that the cost-effectiveness of broad-based policy solutions to improve physical access to large food stores or to stimulate demand may be limited when it comes to easing entry in areas with multiple stores.

Suggested Citation

  • Cleary, Rebecca & Bonanno, Alessandro & Chenarides, Lauren & Goetz, Stephan J., 2018. "Store profitability and public policies to improve food access in non-metro U.S. counties," Food Policy, Elsevier, vol. 75(C), pages 158-170.
  • Handle: RePEc:eee:jfpoli:v:75:y:2018:i:c:p:158-170
    DOI: 10.1016/j.foodpol.2017.12.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306919217304505
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.foodpol.2017.12.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Prell, Mark & Smallwood, David, 2017. "Comparing Alternative Economic Mechanisms To Increase Fruit and Vegetable Purchases," Economic Information Bulletin 256715, United States Department of Agriculture, Economic Research Service.
    2. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-177, March.
    3. Katherine Appleton & Ann Hemingway & Laure Saulais & Caterina Dinnella & Erminio Monteleone & Laure Depezay & David Morizet & F. Armando Perez-Cueto & Ann Bevan & Heather Hartwell, 2016. "Increasing vegetable intakes: rationale and systematic review of published interventions," Post-Print hal-02118595, HAL.
    4. Catherine Schaumans & Frank Verboven, 2015. "Entry and Competition in Differentiated Products Markets," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 195-209, March.
    5. Rudkin, Simon, 2014. "Supermarkets versus local shopping: Welfare implications of retail provision mode," Economics Letters, Elsevier, vol. 124(3), pages 396-398.
    6. Margaret Andrews & Rhea Bhatta & Michele Ver Ploeg, 2013. "An Alternative to Developing Stores in Food Deserts: Can Changes in SNAP Benefits Make a Difference?," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 35(1), pages 150-170.
    7. Grindal, Todd & Wilde, Parke & Schwartz, Gabe & Klerman, Jacob & Bartlett, Susan & Berman, Danielle, 2016. "Does food retail access moderate the impact of fruit and vegetable incentives for SNAP participants? Evidence from western Massachusetts," Food Policy, Elsevier, vol. 61(C), pages 59-69.
    8. Timothy K.M. Beatty, 2010. "Do the Poor Pay More for Food?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 92(3), pages 608-621.
    9. Michael R. Thomsen & Rodolfo M. Nayga & Pedro A. Alviola & Heather L. Rouse, 2016. "The Effect of Food Deserts on the Body Mass Index of Elementary Schoolchildren," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(1), pages 1-18.
    10. Chenarides, Lauren & Jaenicke, Edward C. & Volpe, Richard J., 2015. "Patterns of Product Assortment and Price-Cost Margins across the Food Retailing Landscape," 143rd Joint EAAE/AAEA Seminar, March 25-27, 2015, Naples, Italy 202710, European Association of Agricultural Economists.
    11. Jessie Handbury & David E. Weinstein, 2015. "Goods Prices and Availability in Cities," Review of Economic Studies, Oxford University Press, vol. 82(1), pages 258-296.
    12. Cromartie, John, 2016. "Five Years of Population Loss in Rural and Small-Town America May Be Ending," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, issue 05, pages 1-1, June.
    13. Davis, Morris A. & Heathcote, Jonathan, 2007. "The price and quantity of residential land in the United States," Journal of Monetary Economics, Elsevier, vol. 54(8), pages 2595-2620, November.
    14. Katja Seim, 2006. "An empirical model of firm entry with endogenous product‐type choices," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 619-640, September.
    15. Moore, L.V. & Diez Roux, A.V., 2006. "Associations of neighborhood characteristics with the location and type of food stores," American Journal of Public Health, American Public Health Association, vol. 96(2), pages 325-331.
    16. ver Ploeg, Michele & Breneman, Vince & Farrigan, Tracey & Hamrick, Karen & Hopkins, David & Kaufman, Phillip & Lin, Biing-Hwan & Nord, Mark & Smith, Travis A. & Williams, Ryan & Kinnison, Kelly & Olan, 2009. "Access to Affordable and Nutritious Food: Measuring and Understanding Food Deserts and Their Consequences: Report to Congress," Administrative Publications 292130, United States Department of Agriculture, Economic Research Service.
    17. Ver Ploeg, Michele & Mancino, Lisa & Todd, Jessica E. & Clay, Dawn Marie & Scharadin, Benjamin, 2015. "Where Do Americans Usually Shop for Food and How Do They Travel To Get There? Initial Findings from the National Household Food Acquisition and Purchase Survey," Economic Information Bulletin 262116, United States Department of Agriculture, Economic Research Service.
    18. Leibtag, Ephraim S. & Kaufman, Phillip R., 2003. "Exploring Food Purchase Behavior of Low-Income Households: How Do They Economize?," Agricultural Information Bulletins 33711, United States Department of Agriculture, Economic Research Service.
    19. Bresnahan, Timothy F & Reiss, Peter C, 1991. "Entry and Competition in Concentrated Markets," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 977-1009, October.
    20. Panle Jia, 2008. "What Happens When Wal-Mart Comes to Town: An Empirical Analysis of the Discount Retailing Industry," Econometrica, Econometric Society, vol. 76(6), pages 1263-1316, November.
    21. Timothy F. Bresnahan & Peter C. Reiss, 1987. "Do Entry Conditions Vary across Markets?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3, Specia), pages 833-882.
    22. Neil Wrigley & Daniel Warm & Barrie Margetts & Amanda Whelan, 2002. "Assessing the Impact of Improved Retail Access on Diet in a 'Food Desert': A Preliminary Report," Urban Studies, Urban Studies Journal Limited, vol. 39(11), pages 2061-2082, October.
    23. Ver Ploeg, Michele & Rahkovsky, Ilya, 2016. "Recent Evidence on the Effects of Food Store Access on Food Choice and Diet Quality," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, issue 04, pages 1-1, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Parke Wilde & Mehreen Ismail & Michele Ver Ploeg, 2021. "The Quality of the Food Retail Environment When Consumers May Be Mobile," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(2), pages 701-715, June.
    2. Lauren Chenarides & Edward C. Jaenicke, 2019. "Documenting the Link Between Poor Food Access and Less Healthy Product Assortment Across the U.S," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(3), pages 434-474, September.
    3. Metin Çakır & Xiangwen Kong & Clare Cho & Alexander Stevens, 2020. "Rural Food Retailing and Independent Grocery Retailer Exits," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(5), pages 1352-1367, October.
    4. Joel Cuffey & Timothy K. M. Beatty, 2022. "Effects of competing food desert policies on store format choice among SNAP participants," American Journal of Agricultural Economics, John Wiley & Sons, vol. 104(4), pages 1485-1511, August.
    5. Chen, Xuan & Liu, Yizao & Jaenicke, Edward C. & Rabinowitz, Adam N., 2019. "New concerns on caffeine consumption and the impact of potential regulations: The case of energy drinks," Food Policy, Elsevier, vol. 87(C), pages 1-1.
    6. Hughner, Renee Shaw & Dumitrescu, Claudia & Chenarides, Lauren & Wharton, Christopher & Lacagnina, Gina, 2021. "Integrating Experiential Learning into a Food Systems Framework: An Application to Promote Food Deserts and Food Access Concepts Among College Students," Applied Economics Teaching Resources (AETR), Agricultural and Applied Economics Association, vol. 3(4), September.
    7. Sarah A. Low & Martha Bass & Dawn Thilmany & Marcelo Castillo, 2021. "Local Foods Go Downstream: Exploring the Spatial Factors Driving U.S. Food Manufacturing," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(3), pages 896-915, September.
    8. Rebecca Cleary & Lauren Chenarides, 2022. "Food retail profits, competition, and the Great Recession," Agribusiness, John Wiley & Sons, Ltd., vol. 38(3), pages 557-578, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bonanno, Alessandro & Chenarides, Lauren & Goetz, Stephan J., 2012. "Limited Food Access as an Equilibrium Outcome: An Empirical Analysis," 2012 AAEA/EAAE Food Environment Symposium 123196, Agricultural and Applied Economics Association.
    2. Chenarides, Lauren & Jaenicke, Edward C., 2016. "Store Choice and Consumer Behavior in Food Deserts: An Empirical Application of the Distance Metric Method," 2017 Allied Social Sciences Association (ASSA) Annual Meeting, January 6-8, 2017, Chicago, Illinois 250118, Agricultural and Applied Economics Association.
    3. Rebecca Cleary & Lauren Chenarides, 2022. "Food retail profits, competition, and the Great Recession," Agribusiness, John Wiley & Sons, Ltd., vol. 38(3), pages 557-578, July.
    4. Lauren Chenarides & Edward C. Jaenicke, 2019. "Documenting the Link Between Poor Food Access and Less Healthy Product Assortment Across the U.S," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(3), pages 434-474, September.
    5. Alessandro Bonanno & Francesco Bimbo & Elena Castellari & Paolo Sckokai, 2017. "Five-a-Day, Fruit and Vegetables Portions, and the Food Environment: The Italian Case," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 39(4), pages 682-709.
    6. Nishida, Mitsukuni & Gil, Ricard, 2014. "Regulation, enforcement, and entry: Evidence from the Spanish local TV industry," International Journal of Industrial Organization, Elsevier, vol. 32(C), pages 11-23.
    7. Mitsukuni Nishida, 2015. "Estimating a Model of Strategic Network Choice: The Convenience-Store Industry in Okinawa," Marketing Science, INFORMS, vol. 34(1), pages 20-38, January.
    8. Varela, Mauricio J., 2018. "The costs of growth: Accelerated growth and crowd-out in the Mexican supermarket industry," International Journal of Industrial Organization, Elsevier, vol. 61(C), pages 1-52.
    9. Christian Bontemps & Raquel Menezes Bezerra Sampaio, 2020. "Entry games for the airline industry," Post-Print hal-02137358, HAL.
    10. David Atkin & Benjamin Faber & Marco Gonzalez-Navarro, 2018. "Retail Globalization and Household Welfare: Evidence from Mexico," Journal of Political Economy, University of Chicago Press, vol. 126(1), pages 1-73.
    11. An-Hsiang Liu & Ralph Siebert, 2020. "The Competitive Effects of Declining Entry Costs over Time: Evidence from the Static Random Access Memory Market," CESifo Working Paper Series 8552, CESifo.
    12. Ali Umut Guler, 2018. "Inferring the Economics of Store Density from Closures: The Starbucks Case," Marketing Science, INFORMS, vol. 37(4), pages 611-630, August.
    13. Lalit Manral, 2015. "The demand-side dynamics of entrant heterogeneity," Journal of Evolutionary Economics, Springer, vol. 25(2), pages 401-445, April.
    14. Alyssa J. Moran & Yuxuan Gu & Sasha Clynes & Attia Goheer & Christina A. Roberto & Anne Palmer, 2020. "Associations between Governmental Policies to Improve the Nutritional Quality of Supermarket Purchases and Individual, Retailer, and Community Health Outcomes: An Integrative Review," IJERPH, MDPI, vol. 17(20), pages 1-23, October.
    15. Sha Yang & Shijie Lu & Xianghua Lu, 2014. "Modeling Competition and Its Impact on Paid-Search Advertising," Marketing Science, INFORMS, vol. 33(1), pages 134-153, January.
    16. Timothy Dunne & Shawn D. Klimek & Mark J. Roberts & Daniel Yi Xu, 2013. "Entry, exit, and the determinants of market structure," RAND Journal of Economics, RAND Corporation, vol. 44(3), pages 462-487, September.
    17. Aradillas-Lopez, Andres, 2012. "Pairwise-difference estimation of incomplete information games," Journal of Econometrics, Elsevier, vol. 168(1), pages 120-140.
    18. Vishal Singh & Ting Zhu, 2008. "Pricing and Market Concentration in Oligopoly Markets," Marketing Science, INFORMS, vol. 27(6), pages 1020-1035, 11-12.
    19. Xiao, Mo & Orazem, Peter F., 2011. "Does the fourth entrant make any difference?: Entry and competition in the early U.S. broadband market," International Journal of Industrial Organization, Elsevier, vol. 29(5), pages 547-561, September.
    20. Liu, An-Hsiang & Siebert, Ralph B., 2022. "The competitive effects of declining entry costs over time: Evidence from the static random access memory market," International Journal of Industrial Organization, Elsevier, vol. 80(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jfpoli:v:75:y:2018:i:c:p:158-170. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/foodpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.