Food Prices and Selection Options in Food Stores and Markets Serving Low-Income Households Helen H. Jensen, Iowa State University Institute of Medicine March 28, 2012

Evidence on prices Prices of food vary by region –Todd, Leibtag & Penberthy 2011 Nontraditional stores (e.g. supercenters, mass merchandizers) have lower prices on dairy, meat, fruit and vegetables, and grain products; Convenience store prices are higher –Leibtag, Barker & Dutko 2010; Todd, Leibtag & Penberthy 2011 Lower income households shop at supercenters/discount stores and pay less for food There may be “quality” differences. –Broda, Leibtag & Weinstein 2009

Evidence on prices Lower income households follow practices to economize on food costs (Leibtag & Kaufman 2003) –Purchase more random weight items (meat, vegetables, fruit) on promotion –Spend higher share of expenditures on private label products –Select less expensive fruits and vegetables

Evidence on prices African American youth and families in Georgia and Iowa respond to price in decisions on fruit and vegetable consumption (Zhylyevskyy, Jensen et al. 2010) –Fruit and vegetable prices are inversely related to consumption of fruit and vegetables –Other factors (e.g., family and friends) important in determining food choices

Access and Availability Food Deserts (Ver Ploeg et al., 2009) –Low income area (40% of residents have income less than or equal to 200% poverty) –Without access to vehicle (rural – 7.4% in low income areas) –More than 1 mile from supermarket Rural areas – Iowa (Fletcher, et al. 2010) –For those with income less than 200% poverty Own at least one vehicle – 86% Reliable vehicle (always) available – 62%

Access and Availability Urban areas – New Orleans (Bodor, et al. 2010) Characteristics of African-American and Mixed-race tracts African American tracts had less shelf space to fresh fruits and fresh vegetables, less frozen fruits and vegetables African American neighborhoods had fewer supermarkets CharacteristicAfrican American Mixed Race Population density Household income19,25537,502 Poverty rate % Car ownership rate % African American %

Assessing Adequacy in Markets Serving Low-Income Households Challenges –Role of incentives to “economize” in food selection –“At risk” households and special needs Subgroups (elderly, those lacking access to transportation) –Determining appropriate mechanisms for making “adequate” Additional money resources; management (SNAP-Ed) Store access; enhance availability of healthy foods Transportation Vendors – encourage availability –support for capital equipment (see CACFP recommendations for providers & food sources)

References Bodor, JN, JC Rice, TA Farley, CM Swalm, D Rose Disparities in food access: Does aggregate availability of key foods from other stores offset the relative lack of supermarkets in African-American neighborhoods?” Preventive Medicine 51: Broda, C, E Leibtag, DE Weinstein The Role of Prices in Measuring the Poor’s Living Standards Journal of Economic Perspectives, 23 (2): 77–97. Fletcher, C, S Garasky, HH Jensen, R Nielsen Transportation Access: A Key Employment Barrier for Rural Low-Income Families. Journal of Poverty, 14:123–144. Leibtag, E, C Barker, P Dutko How Much Lower Are Prices at Discount Stores? An Examination of Retail Food Prices. USDA, Economic Research Report No. (ERR- 105). October. Leibtag, ES,PR Kaufman Exploring Food Purchase Behavior of Low-Income Households: How Do They Economize? ERS, USDA. Agriculture Information Bulletin No June. Todd, JE, E Leibtag, C Penberthy Geographic Differences in the Relative Price of Healthy Foods. USDA, Economic Information Bulletin No. (EIB-78). June. Ver Ploeg, M. et al Access to Affordable and Nutritious Food--Measuring and Understanding Food Deserts and Their Consequences: Report to Congress Administrative Publication, No. AP-036, USDA, ERS, June. Zhylyevskyy, O, HH Jensen, SB Garasky, CE Cutrona, FX Gibbons Effects of Family, Friends, and Relative Prices on Fruit and Vegetable Consumption by African American Youths. Iowa State University, CARD, 10-WP 515. September.