Nutritional Effects of Food Deserts: A Story of Supply or Demand

Despite possessing over one-third of the world’s wealth, America suffers from higher poverty rates and worse health outcomes than other wealthy countries. Poor health outcomes are not felt equally across the country but, rather, are disproportionately concentrated in the poorest neighborhoods. One potential reason for this inequality is that low-income neighborhoods are more likely to be food deserts—places where healthy foods are expensive, low-quality, or unavailable.

In a 2017 paper, Allcott, Diamond, and Dubé try to disentangle why food deserts exist, asking: What better explains why people in low-income areas consume less nutritious foods: supply or demand? The authors rely on nationwide household grocery purchase data from 2004-2015, to which they assign health index scores based on proportions of “healthy” versus “unhealthy” macronutrients. Consistent with expectations, items for sale in low-income neighborhoods had lower health indices, including more sugar, fewer whole grains, and less produce. Low-income neighborhoods also more often had convenience stores, which provide less nutritious food than supermarkets available in higher income areas.

Differences in supply might cause the income nutrition discrepancy, or they could result from low- and high-income households having systematically different food preferences. To disentangle the effects of supply and demand, the researchers tracked the impact of two events: a household moving to a new county, and a supermarket entering nearby. They focus on these events because both allow examination of effects of changing the local environment while keeping the household constant.

The researchers found that in the years before and after a move, household consumption did not change to match the new county’s patterns. Store entry did affect where people bought groceries, but not in a way that improved healthy food purchases. Instead of reducing unhealthy convenience store buys, people reduced expenditures at more distant supermarkets in favor of buying the same foods at the nearby store. Both results seem to contradict a supply-side explanation for the nutrition-wealth relationship, as people maintained similar nutritional purchases despite changes in their shopping environment.

The researchers offer a couple of reasons for these patterns. One is that across all incomes, people already travel long distances to shop. Compared to a nationwide average of 5.2 miles, low income households travel 4.8 miles, and families in food deserts travel 7 miles. Another reason is that low-income and high-income households already spend similar proportions of food dollars in supermarkets (around 90 percent), regardless of whether or not they live in food deserts.

The germane policy question is more targeted: if poor and rich neighborhoods faced the same food prices and availability, how much would this mitigate their nutritional gap? To answer this, the authors used nationwide consumption and store data to estimate a structural demand model in which they infer how people in different income groups respond to prices and nutrition when purchasing food.

They used the model to run simulations in which poor neighborhoods were exposed to the same prices and nutritious foods as in rich neighborhoods. They found that doing so reduced nutritional inequality by a mere nine percent, indicating the remaining 91 percent is accounted for by differences in demand. Correspondingly, higher-income households showed stronger preferences for “healthy” food groups of fiber, protein, fruits and vegetables. In survey data matched with the consumer data set, education and nutrition knowledge correlated with this discrepancy in healthy grocery demand, explaining 20 and 7 percent, respectively.

One culprit for the discrepancy between high- and low-income household preferences might be food prices. Healthy foods are more expensive per calorie and, therefore, may exert a higher burden on low-income households. The researchers acknowledge this but note that the relative cost between healthy and unhealthy food is similar across high- and low-income zip codes. Further, the exorbitant costs of healthful foods come largely from fresh produce; when they are excluded in favor of other nutritious foods, price per calorie becomes lower than that of their unhealthy counterparts.

Thus, the researchers posit that if policymakers want to reduce nutrition inequality, altering local food supply is not the answer. Remedying food deserts, they argue, benefits people mainly by reducing travel costs, as opposed to improving their eating habits. For some, reducing travel costs might provide important relief: for example, 0.6 percent of the population lives in a food desert and does not own a car. But to combat nutritional disparities more broadly, the authors instead endorse interventions focusing on education, acting on consumer preferences and shifting demand.

Article source: Allcott, Hunt, Rebecca Diamond, and Jean-Pierre Dubé. “The Geography of Poverty and Nutrition: Food Deserts and Food Choices Across the United States,” NBER Working Paper No. 24094 (2017).

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