Trends in the over consumption of unhealthy foods paired with the under consumption of healthy foods have, in part, led to the current American obesity epidemic. Poor food consumption behavior trends are partly driven by market failures within the food industry. In order to efficiently address these market failures and the obesity crisis, the source of the market failure must be acknowledged and attended to, whether it be the supply side or the demand side or both. The goal of my dissertation is to provide a deeper understanding of low-income US consumers’ access to and demand for healthy food in an attempt to help combat the increasing obesity rates in America. Contributing to this goal, my dissertation contains three chapters.The first chapter models a supermarket chain’s decision making process to determine the conditions under which a supermarket chain would enter a food desert, and how interventions and incentives could influence entry. To meet this objective, a game theoretical model is developed. The model shows that supermarket entry will occur once investment costs and marginal costs are low enough for the firms to make positive profits. However, this model also reveals two nuances for initiatives to consider. First, policy interventions do not need to completely subsidize marginal costs. Second, without urgency attached to cost saving initiatives, supermarket chains will continue to wait to follow other supermarket chains into the food desert to avoid facing demand uncertainty. Demand uncertainty, is further explored in chapters 2 and 3 which analyze the receipt scanner data from an independent supermarket in a predominantly low-income, urban community of Detroit, Michigan with a majority of its customers classified as food desert residents. The second chapter explores fruit and vegetable demand from the perspective of color, since different colored fruits and vegetables are associated with different health benefits. This novel modified two stage Quadratic Almost Ideal Demand System analysis of fruit and vegetable demand shows that most of the prices and customer shopping behaviors affect the different color purchase decisions. Each color class responds negatively to its own price and positively to fruit and vegetable expenditure increases. The fruit (vegetable) colors are generally complementary to other fruit (vegetable) colors and substitutes to the vegetable (fruit) colors. The elasticities suggest that policy interventions aimed at encouraging diverse fruit and vegetable colors should focus on expenditure based incentives rather than price based incentives and that supermarket chain managers should focus their price discounts on the fruits and vegetables within the yellow/orange fruit and red/blue/purple vegetable classes for the greatest increase in produce profits.The final chapter offers an evaluation of the nutrition intervention Double Up Food Bucks. To encourage the consumption of more fresh fruits and vegetables, this program provided Supplemental Nutrition Assistance Program beneficiaries who spent $10 on fresh fruits and vegetables, in one transaction, with a $10 gift card exclusively for Michigan grown fruits and vegetables. This study analyzes how fruit and vegetable purchase behaviors were affected by the initiation and conclusion, as well as any persistent effects, of the program, using a difference in difference fixed effects estimation strategy. Participation is low; however, the program increased vegetable expenditures, fruit and vegetable expenditure shares, and the variety of fruits and vegetables purchased during its implementation, but the effects are modest and not sustainable without the financial incentive. Together, these essays shed light on important considerations for initiatives aimed at improving nutrition and health in urban food deserts.
Read
