Food Expensiveness in Scotland's Remote Areas: An Analysis of Household Food Purchases☆

Abstract

AbstractThe purpose of this paper is to investigate whether consumers in Scotland's remote areas suffer from food prices that are higher than the average national prices (i.e., whether a “remoteness premium” exists). The question has been raised by several organizations in those communities looking at the high prices in local stores. This paper provides a new perspective using actual purchasing prices of a sample of 5,252 households in Scotland for 2017 and 2018. In this way, households' ability to shop for lower prices is considered, unlike in previous studies. An expensiveness index was computed to measure the expensiveness of food at household level and control for differences in quality. It showed that consumers in remote areas pay a small premium (0.3 to 0.4 percent) with respect to average prices, which is statistically significant but economically not relevant. To understand the effect of several factors, AHEI was regressed on a number of explanatory variables including local area characteristics and household demographics and consumers' shopping strategy. The results were used to simulate three hypothetical scenarios related to impact of changes in the population's age, access to discount stores, and social deprivation on food expensiveness.