The Effects of the Spatial Distribution of Grocery Stores on Food Prices on Low Income Neighborhoods

Abstract

This study examines how the spatial distribution of grocery stores affects food prices charged in neighborhoods with different median incomes. Studies have shown that low-income neighborhoods often have fewer grocery stores, smaller grocery stores and have higher prices for a standard market basket of food than higher income neighborhoods. In addition, a greater concentration of firms has reduced the number of companies operating supermarkets, reducing competition. Smaller stores and greater concentration have both been shown to cause higher prices in food retail outlets. However, the impact of the number and distribution of stores throughout a neighborhood on food prices has not yet been studied.