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Supply-side subsidies to improve food access and dietary outcomes: Evidence from the New Markets Tax Credit

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  • Matthew Freedman

    (University of California Irvine, USA)

  • Annemarie Kuhns

    (US Department of Agriculture, Economic Research Service, USA)

Abstract

In an effort to improve diet and health outcomes, policymakers have increasingly turned to supply-side subsidies aimed at encouraging investment by supermarkets and other food retailers in low-income areas. This article examines whether the US federal government’s New Markets Tax Credit (NMTC) has affected the entry of retail food establishments, and in turn food shopping and purchasing patterns, in low-income communities. To identify the impacts of the programme, we take advantage of a discontinuity in NMTC funding generated by the formula used to determine the eligibility of census tracts for investment under the programme. We find that the NMTC Program has had modest, but positive impacts on supermarket entry in low-income communities. Based on household-level scanner data, there are no detectable effects on households’ food purchasing patterns in affected neighbourhoods, at least in the short run.

Suggested Citation

  • Matthew Freedman & Annemarie Kuhns, 2018. "Supply-side subsidies to improve food access and dietary outcomes: Evidence from the New Markets Tax Credit," Urban Studies, Urban Studies Journal Limited, vol. 55(14), pages 3234-3251, November.
    • Handle: RePEc:sae:urbstu:v:55:y:2018:i:14:p:3234-3251
    DOI: 10.1177/0042098017740285
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    2. 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.
    3. Ayse Nilgun BALAS & Halil Dincer KAYA, 2019. "The Impact of Global Crisis on the Subsidies PAID to Retailers and Wholesalers in Eastern European and Central Asian Countries," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 20(1), pages 14-29, March.
    4. Sean Clark, 2020. "Financial Viability of an On-Farm Processing and Retail Enterprise: A Case Study of Value-Added Agriculture in Rural Kentucky (USA)," Sustainability, MDPI, vol. 12(2), pages 1-16, January.
    5. Minjee Kim, 2022. "How do tax-based revitalisation policies affect urban property development? Evidence from Bronzeville, Chicago," Urban Studies, Urban Studies Journal Limited, vol. 59(5), pages 1031-1047, April.

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    More about this item

    Keywords

    consumption; economic development; health; place-based policies; retail food;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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