Store profitability and public policies to improve food access in non-metro U.S. counties

Rebecca Cleary, Alessandro Bonanno, Lauren Chenarides, Stephan J. Goetz

Research output: Contribution to journalArticle

3 Scopus citations

Abstract

Access to affordable and nutritious food is a widely-debated public policy issue in the U.S. In non-metro (including semi-urban and rural) U.S. areas, poor food access is mostly the result of lack of food stores, and in particular the absence of large ones (e.g., full-line groceries or superstores). Any policy designed to improve food access in non-metro U.S. areas should recognize that improving stores’ profitability is crucial to policy success in the long-run. We adapt an empirical entry model to assess the effectiveness of two types of policies to improve food access – demand-stimulating policies (DSP), such as increases in Supplemental Nutrition Assistance Program dollars, and supply-side policies (SSP), such as subsidies to reduce establishment costs – by estimating the minimum market size needed for one or more large food stores in non-metro U.S. counties to be profitable. We find that neither type of intervention is preferred a priori and that the cost-effectiveness of each policy type depends upon the presence of an adjacent metropolitan county, the number of pre-existing stores, and the duration of the demand-side stimuli. Additionally, our results suggest that the cost-effectiveness of broad-based policy solutions to improve physical access to large food stores or to stimulate demand may be limited when it comes to easing entry in areas with multiple stores.

Original languageEnglish (US)
Pages (from-to)158-170
Number of pages13
JournalFood Policy
Volume75
DOIs
StatePublished - Feb 2018

Keywords

  • Demand stimuli
  • Entry
  • Food-store location
  • Lump-sum subsidy
  • Non-metro U.S.

ASJC Scopus subject areas

  • Food Science
  • Development
  • Sociology and Political Science
  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

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