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Does Food Cost More in Food Deserts?

Recent research has found that in the United States, limited access to healthy food is associated with a lower consumption of fruits and vegetables, and a higher probability of obesity and other dietary related health problems. Areas with limited food access and low average incomes are often referred to as food deserts.

Several federal, state, and local programs have emerged in response to the challenge of food deserts, including encouraging large grocery retailers to move into underserved areas, improving food options in corner stores, encouraging mobile grocery vendors, and making Supplemental Nutrition Assistance Program (SNAP) Electronic Benefit Transfer (EBT) available at farmers’ markets. Since 2001, California, Nevada, Texas, Ohio, Louisiana, Illinois, New York, Pennsylvania, D.C., and Maryland have enacted legislation aimed at increasing the number of healthy food retailers or have subsidized local stores to provide fresh fruits and vegetables.

Food deserts are believed to have higher food prices and less access to foods needed for a healthy diet than non-food deserts. It is, however, unclear whether prices of a nutritious diet are really higher in food deserts. Most studies that compare food prices in food deserts and non-food deserts are case studies that focus on a single neighborhood and use prices from one or two store chains. Other existing studies primarily compare prices of particular food stuffs, especially fresh food such as fruits and vegetables. We compare the price of a nutritious diet in food deserts to non-food deserts (where food deserts are defined as low-income, low-access census tracts).

We specifically compare prices in food desert census tracts to those in census tracts of similar income but with higher access, and higher income but similar access to attempt to differentiate the effect of access from that of income. No other research that we know of compares food prices of a broad set of food products between food deserts and non-food deserts on a national scale with a comprehensive list of store price data. We find that while food deserts do have slightly higher effective prices, those higher prices are largely driven by the decrease in food variety available, and that prices for the same foods are quite similar across food deserts and non-food deserts.

Previous research using food price indices largely does not account for the fact that available products differ across location when comparing food prices. One can get biased price comparisons if one defines the price of bread to be the price of an artisanal loaf in one location and low-quality white bread in another, or one defines the price of beef to be the price of sirloin tips in one location and to be the price of ground chuck in another. Second, price comparisons may be biased if some products are only available in some locations—called “variety bias”.

Insofar as products are not perfect substitutes, consumers will prefer to have more food items available. Controlling for both of these potential effects can substantially affect the estimated price for a basket of food. Existing studies have shown that after controlling for both biases, contrary to previous findings, larger cities have lower average food price indices than smaller cities.

We construct a localized price index for each census tract that addresses both sorts of bias and compare it for food deserts to non-food deserts. We use weekly barcode-level store sales data of a nationally representative geographic sample from Information Resources, Inc. (IRI) in 2012. Next, we define an affordable and nutritious diet following the USDA Thrifty Food Plan (TFP), which is a minimum cost diet that is defined with respect to low-income households’ purchasing behavior and nutritional guidelines. Then we construct the localized TFP variety-adjusted price index, Exact Price Index (EPI), based on the differential minimum cost to achieve the same level of consumer benefit across census tracts.

Our localized TFP EPI is the product of an unadjusted price index that accounts for the prices of food available in the census tract and a variety adjustment component that addresses variety bias. The variety adjustment component accounts for the substitutability between different food items and the importance of each food item in the EPI.


When we assume consumers can purchase groceries in their own and neighboring census tracts, we find that the price index without adjusting for variety availability is not statistically significantly different between food deserts and all types of non-food deserts. Second, after accounting for the variety bias, the EPI in food deserts is 3 percent to 8 percent higher than low-income high-access census tracts, 3 percent to 6 percent higher than high-income low-access census tracts and 3 percent to 11 percent higher than high-income high-access census tracts. Thus, consumers living in food deserts face a smaller variety of groceries and a slightly higher food price index than consumers in census tracts with greater access to stores or consumers in census tracts with higher income.

When we compare only those food groups that are commonly available in convenience stores, we find effectively no price differences. Third, we find that the food prices in food deserts are significantly higher than non-food deserts because there are no supermarkets nearby. Fourth, compared with average and median TFP costs that use county and state average/median prices to impute missing food prices, the EPI captures greater differences in TFP prices between food deserts and all types of non-food deserts.

Our findings suggest that living in a food desert affects the overall food prices faced by households to a small extent when consumers can shop within their home census tracts and in contiguous census tracts. The difference in prices is largely driven by differences in available variety. As such, while higher food prices are associated with higher rates of food insecurity, the results of our work suggest that living in a food desert is unlikely to influence food insecurity to a great extent, at least in as much as substitute foods are available.



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