|
|
Low-Income? No Car? Expect to Pay More for Groceries (8/23/2008)
Households located in poor neighborhoods pay more for the same items than people living in wealthy ones, according to a new study in the Journal of Consumer Research.
Author Debabrata Talukdar (Columbia University) examines the impact of what has been dubbed the "ghetto tax" on low-income individuals. His study found that the critical factor in how much a household spends on groceries is whether it has access to a car. "Arguably, as the bigger, more cost-efficient stores move out, the poor increasingly are likely to find themselves choosing between traveling farther to purchase nutritious, competitively priced groceries or paying inflated prices for low-quality, processed foods at corner stores," Talukdar writes.
According to the findings, those without access to cars-which are exclusively poor households, but include only 40 percent of poor households- pay higher prices for groceries than households with access to a car (whether wealthy or poor). Lacking mobility means consumers buy from the nearest neighborhood store rather than larger regional or national grocery chains, which have lower prices.
The author did a field study in Buffalo, New York, dividing up zip-code areas into richest, medium, and poorest neighborhood. He then used multiple sources to determine all the stores that sell grocery products in the 17 neighborhoods selected for the study. He then tracked prices of 15 items across 115 stores for three months, and found that, relative to the lowest available price in all neighborhoods, shoppers at the richest, medium, and poorest neighborhoods pay on average 11 percent, 14 percent, and 22 percent more, respectively. The study also examined the behaviors, attitudes, and demographics of consumers by interviewing shoppers at the stores.
The author believes the poor aren't being intentionally slighted. "Stores' pricing and location decisions in most instances are guided by competitive factors rather than any bias against the poor or their neighborhoods," Talukdar writes.
Given the extreme inequality in access to affordable groceries, the author has suggestions for a more equitable solution. "One suggestion would be to explore the possibility of encouraging 'co-operative stores,' which spreads the ownership among a relatively large group of stake-holders within the poor community while at the same time increasing its operational economies of scale. Another possibility might be to consider joint ownership or management of franchises of selective stores in the poorest neighborhoods by the corporate owners of big grocery chains and poor residents."
Debabrata Talukdar. "Cost of Being Poor: Retail Price and Consumer Price Search Differences Across Inner-City and Suburban Neighborhoods" Journal of Consumer Research: October 2008.
Note: This story has been adapted from a news release issued by the Journal of Consumer Research
Comments:
| 1. |
tndal |
8/23/2008 11:15:00 AM MST |
someone who has a car must pay for the car, gas, insurance, parking, upkeep _and_ the groceries.
The article conflates three different costs: cost of car, cost of gas/insurance/upkeep for car, and cost of groceries. To be honest you should also add the "cost of time" - the cost of travel time to/from the store, which may be significantly less if the grocery store is within walking distance.
|
| 2. |
Ed Barton |
8/23/2008 4:06:41 PM MST |
tndal: the car payments, insurance, parking, and car upkeep are the same whether they use the car to buy groceries or walk. To compare, you look at how much extra they pay during a trip, ie the cost of gas for one trip.
Assuming the shop is 20 miles away, a car with 20mpg will use 2 gallons, or $8. A weekly shopping trip for a family can easily reach over $200, so the gas is only 4%, compared to the 22% found in the study.
As for time, consider that when you walk to the store, you're limited by what you can carry, so walking will take more time overall, because it will take more trips to buy the same amount.
|
| 3. |
Nate |
8/23/2008 6:36:52 PM MST |
I think what tndal is doing is comparing owning-a-car-and-thus-saving-money-on-groceries versus not-owning-a-car-and-thus-walking-to-the-nearest-store. In that case, you certainly would factor in the cost of car ownership. Also, who pays $200/wk for groceries? I shop somewhat thriftily for two young people, and end up paying around $40/wk.
I think a much better solution would simply be to organize carpools to the local supermarket. Get someone with an SUV (or better yet, a van) to make a fully-loaded trip weekly, and everyone gives the owner $10/trip. They make a little cash to offset their vehicle, and everyone else saves money. Of course, reducing GHG emissions is just a bonus here.
|
Leave a Reply:
|
|
Subscribe
