Dollar Store Entry, Food Prices, and Food Security

Project: Research project

Project Details


This Standard Research Grant addresses USDA-NIFA Priority Area A1641: Economics, Markets, and
Trade. The proposed research investigates the market-entry of dollar stores as an equilibrium
phenomenon and examines whether they represent a market solution to the food desert problem, one that
is economically sustainable, nutritionally sound, and robust to recent developments in the food retailing
market. We examine dollar-store entry and impact using four complementary approaches, each targeted
toward a different dimension of the underlying policy question. We will examine the entry behavior of
dollar stores both through a purely empirical lens of econometric causation and through a structural model
of dynamic, strategic entry. We will test hypotheses regarding the competitive effects of dollar-store entry
on the existing landscape of food retail and consider the dynamic incentives faced by dollar stores given
the imperfectly competitive, oligopolistic food retailing industry. We aim to test critical hypotheses
regarding the relative prices in markets not served by traditional retailers compared to those that are,
focusing on random-weight items. We will examine the impact of dollar-store entry on food insecurity in
communities that are served primarily by dollar stores and not traditional retailers. We seek to provide a
consistent empirical story of the structure of dollar-store entry, its underlying causes, and its
consequences on food availability in host communities. By achieving each of the above objectives, we
will arrive at a better understanding of the important role played by dollar stores in the US food-retailing
industry in addressing food insecurity.
Effective start/end date1/1/2112/31/22


  • USDA: National Institute of Food and Agriculture (NIFA): $473,887.00


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