Food Deserts and the Causes of Nutritional Inequality*

Abstract

We study the causes of “nutritional inequality”: why the wealthy eat more healthfully than the poor in the United States. Exploiting supermarket entry and household moves to healthier neighborhoods, we reject that neighborhood environments contribute meaningfully to nutritional inequality. We then estimate a structural model of grocery demand, using a new instrument exploiting the combination of grocery retail chains’ differing presence across geographic markets with their differing comparative advantages across product groups. Counterfactual simulations show that exposing low-income households to the same products and prices available to high-income households reduces nutritional inequality by only about 10%, while the remaining 90% is driven by differences in demand. These findings counter the argument that policies to increase the supply of healthy groceries could play an important role in reducing nutritional inequality.

Uniform Pricing in U.S. Retail Chains*

“…It is also possible to extend the strategy to instrument for a store's prices with the average demographics of other stores in the chain, following a logic similar to George and Waldfogel (2003). Allcott et al (2018b) and Allcott et al (2018a) are examples of papers that have already built on this strategy.…”

“…The adjustment of local retail prices to local economic conditions is central to a range of economic policy questions. Differences in local retail prices across poor and rich areas may exacerbate or moderate real income inequality (Allcott et al, 2018a). The response of local prices to consumer demand is a key input to understanding business cycles (Stroebel and Vavra, forthcoming).…”

Microeconometric models of consumer demand

“…The CES specification has also been popular due to its analytic solution when quantities demanded are strictly interior. See for instance applications to nutrition preferences by Dubois, Griffith, and Nevo (2014) and Allcott, Diamond, Dube, Handbury, Rahkovsky, and Schnell (2018).…”

Feeding the melting pot: inclusive strategies for the multi-ethnic city

“…However, as authors such as Alkon et al (2013), Shannon (2014), Bedore (2014) and more recently also Allcott et al (2019) argue, the relationship between consumption and provision is not as unidirectional as often thought. Allcott et al (2019)'s study shows that exposing poorer households to the same products and prices available to higher income households only reduced nutritional inequality by roughly ten percent. Moreover, most literature on in-and exclusion regarding food access is geographically oriented towards the US, where the focus is on black and poor minorities who live in strongly segregated urban environments (Mata 2013;Raja et al 2008;Walker et al 2010).…”

“…This question is also important because much of the current literature on in-and exclusion regarding access to 'good food' focuses primarily on the supply side to explain exclusion, looking at the influence of retail availability and product range on consumption patterns of poor ethnic minorities (Walker et al 2010). However, as authors such as Alkon et al (2013), Shannon (2014), Bedore (2014) and more recently also Allcott et al (2019) argue, the relationship between consumption and provision is not as unidirectional as often thought. Allcott et al (2019)'s study shows that exposing poorer households to the same products and prices available to higher income households only reduced nutritional inequality by roughly ten percent.…”