Abstract
A difference-in-differences approach is used to measure the impact of new inner-city grocery store developments on residential housing values in Worcester, Massachusetts. Using geocoded housing sales from 1988–2011, we develop a hedonic model, exploiting temporal and spatial discontinuities, to identify the effect of 12 new grocery stores on neighborhood housing prices. Results suggest these new stores were associated with an increase in sale prices of nearby homes, and these results could help inform current policies related to urban food deserts, in that new grocery stores have the potential to improve neighborhood wealth as well as health.
Highlights
A difference-in-differences approach is used to measure the impact of new innercity grocery store developments on residential housing values in Worcester, Massachusetts
While Worcester has a larger minority population than the state as a whole (36 vs. 22 percent) and lower income ($43,492 in 2012, about two thirds of the state median household income), which are the usual sociodemographic characteristics of residents in food deserts, between 1988 and 2012, 12 new grocery stores opened in the city, tripling the number of grocery stores in the city, during a time frame when overall population increased by approximately 7 percent and new home construction was at the lowest level of the past 60 years (Executive Office of Economic Development, City of Worcester, MA, 2012)
The regression includes spatial indicators to distinguish prices between residential sales properties located more than 800 meters from each new grocery store to properties located within 800 meters
Summary
A difference-in-differences approach is used to measure the impact of new innercity grocery store developments on residential housing values in Worcester, Massachusetts. Geographic areas lacking in affordable healthy food have been termed food deserts, and a growing research literature from many academic disciplines has demonstrated that these food deserts are more likely to occur in poorer neighborhoods (Powell et al 2007, Chen et al 2010, Walker, Keane, and Burke 2010). These geographic regions are more likely to have more convenience stores and fast food outlets than grocery stores, resulting in less healthy food consumption and worse health outcomes for their residents
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