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Measuring Price Differentials in Food Retail

Measuring Price Differentials in Food Retail. Joseph Llobrera Gerald J. Friedman Fellow in Nutrition and Citizenship. Measuring Food Availability and Price. Apples to apples? Red Delicious = SweeTango? How close a match is acceptable? Missing

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Measuring Price Differentials in Food Retail

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  1. Measuring Price Differentials in Food Retail Joseph Llobrera Gerald J. Friedman Fellow in Nutrition and Citizenship

  2. Measuring Food Availability and Price Apples to apples? Red Delicious = SweeTango? How close a match is acceptable? Missing Not an exact match, but comparable items available

  3. Measuring Food Availability and Price Market basket approach Cost of market baskets show combined effect of Differences in item availability Differences in item prices

  4. Hypotheses Food available at smaller stores is more limited more expensive Retail food availability disparities are correlated with and may contribute to obesity disparities (Moore & Diez-Roux, 2006).

  5. PROTEINS GRAINS DAIRY FRUITS VEGETABLES OTHER FOOD

  6. PROTEINS GRAINS DAIRY FRUITS VEGETABLES OTHER FOOD

  7. PROTEINS GRAINS DAIRY FRUITS VEGETABLES OTHER FOOD

  8. Use Market Baskets to Aggregate Market basket is the weighted average cost in dollars of a pound of food (1) Large Store Basket (baseline) (2) Small Store Basket (3) Small Store Basket at Large Store Prices

  9. Total Price Difference Large Store Basket Small Store Basket (2) – (1) = Total Price Difference (different basket at large and small stores) = $3.18 - $2.28 = $0.90 40% higher prices at small stores

  10. Pure Price Difference (2) Small Store Basket (3) Small Store Basket at Large Store Prices (2) – (3) = Pure Price Difference (same basket of goods at both store types) = $3.18 - $2.00 = $1.18 60% higher prices at small stores

  11. Basket Composition Adjustment (1) Large Store Basket (3) Small Store Basket at Large Store Prices (3) – (1) = Basket Composition Difference (large store price of items not available at small stores) = $2.00 - $2.28 = - $0.28

  12. Total Price Difference Pure Price Difference $1.18/lb + + Basket Composition Difference -$0.28/lb _____________________________________________ Total Price Difference $0.90/lb

  13. Observations Smaller retailers more limited range of food items higher prices Importance of distinguishing between differences in availability and differences in prices of comparable items

  14. Thank you! Thesis committee Parke Wilde, PhD (Chair) Beatrice Rogers, PhD Ephraim Leibtag, PhD Please send comments to: Joseph.Llobrera@tufts.edu

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