Do the Poor Pay More for Food? Item Selection and Price Differences Affect Low-Income Household Food Costs
Low-income households may face higher food prices for three reasons: (1) on average, low-income households may spend less in supermarkets--which typically offer the lowest prices and greatest range of brands, package sizes, and quality choices; (2) low-income households are less likely to live in suburban locations where food prices are typically lower; and (3) supermarkets in low-income neighborhoods may charge higher prices than those in nearby higher income neighborhoods. Despite the prevailing higher prices, surveys of household food expenditures show that low-income households typically spend less than other households, on a per unit basis, for the foods they buy. Low-income households may realize lower costs by selecting more economical foods and lower quality items. In areas where food choices are limited due to the kinds and locations of foodstores, households may have sharply higher food costs.
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- Deaton, Angus, 1987. "Estimation of own- and cross-price elasticities from household survey data," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 7-30.
- Thomas L. Cox & Michael K. Wohlgenant, 1986. "Prices and Quality Effects in Cross-Sectional Demand Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(4), pages 908-919.
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