Explaining Disparities in the Cost
of Healthier Food
Karen M. Jetter and Diana L. Cassady
Select Paper Presented at the AAEA meetings
Denver, Colorado
August 2, 2004
Introduction
• This study compares the cost of a standard
market basket of food items to a market
basket with healthier substitutes.
– Example: 100% whole wheat bread vs white
bread.
• Identifies the source of price differences
within stores.
Motivation
• Wanted to examine the environmental
factors that influenced the decision to
purchase healthier food in low-income
areas.
• Public health literature - hypothesized that it
is the lack of availability in grocery stores.
– If healthier options available, people would be
able to buy them.
Motivation
• Implies sub-optimal behavior by store
managers. If profitable to stock a variety of
healthier items in lower income
neighborhoods, they would be there.
• Developed a study to survey stores on the
availability and price of healthier items.
Study
• This study compares the cost of three
market baskets of food items:
– Thrifty Food Plan
– Healthier Substitutes
– Less Healthy Substitutes
Thrifty Food Plan (TFP)
• Developed to show how food stamp
recipients can meet the recommendations of
the Food Pyramid Guidelines on their
monthly food stamp allocations.
• Developed two weeks of menus and a
shopping list to accompany.
Substitutions
Item
Canned Peaches
Canned Pears
Potatoes/Frozen FF
Breads
Cold Cereal
Milk
Cheese
Cooking Oil
Chicken
Frozen Fish
Tuna Fish
Ham
Ground Meat
TFP
Healthy
Least
healthy
Heavy/Lite
Heavy
Frozen FF
Plain
Corn Flakes
1%, Whole
Whole
Vegetable
with skin
Filets/Breaded
Light
Turkey
Lean
Lite
Lite
Potatoes
100% WW
Bran Flakes
Non-Fat, 1%
Low-fat
Canola
Skinless
Filets
Albacore
Turkey
Lowest Fat
Heavy
Heavy
Frozen FF
Plain
Corn Flakes
Whole
Whole
Vegetable
with skin
Breaded
Light
Lowest price
Lowest price
Survey
• Grocery stores surveyed in Sacramento and
Los Angeles.
• 3 surveys complete: June 2003, Sept/Oct
2003, March/April 2004.
• 13 stores in Sacramento and 12 stores in
Los Angeles surveyed each time.
Survey
• Picked stores by neighborhood median
income and type.
–
–
–
–
Very low
Low
Medium
High
≈ mid $20,000
≈ $32,000 - $37,000
≈ $42,000 - $49,000
over $53,000
– Small independent, bulk supermarket, chain
supermarket.
Survey
• Sacramento:
– Unable to find 6 grocery stores in very low
neighborhoods
– 4 very low, 5 low, 2 each medium and high
– 3 small independent, 2 bulk items, 8 chain
• Los Angeles:
– 6 stores very low, 2 each low, medium and high
– No small independent, 3 bulk items, 9 chain
Survey
• 75 stores surveyed
• Surveyors recorded the lowest price per unit
in the market that day.
• Collected label information on
– Fiber content
– Fat content: saturated and unsaturated
– Serving sizes
Results
Healthy
FTP
Least
Healthy
($)
Sacramento
Very Low
Low
Medium
High
427
395
406
419
362
337
335
342
346
322
316
320
Los Angeles
Very Low
Low
Medium
High
384
372
426
504
294
279
334
381
261
254
320
360
Results
Comparison of Market Basket Value
500
400
$
300
200
100
0
Very Low
Low
Medium
High
Very Low
Sacramento
Low
Medium
Los Angeles
Region
Healthy
FTP
Least Healthy
High
How much more expensive is the healthier basket?
Healthy &
Healthy &
Health &
Least
Health &
Least
TFP
Healthy
TFP
Healthy
Percent
($)
Sacramento
Very Low
Low
Medium
High
65
58
70
77
80
73
90
99
18
17
21
22
23
23
29
31
Los Angeles
Very Low
Low
Medium
High
91
94
91
124
124
118
106
145
31
34
27
32
47
47
33
40
Where are the differences?
Healthy & TFP
Sacramento
Very Low
Low
Medium
High
Meats
17.3
15.5
17.1
15.2
Los Angeles
Very Low
Low
Medium
High
14.1
20.0
18.2
19.8
Breads
46.3
42.3
55.5
55.6
73.1
75.5
71.4
102.5
Why do we observe these differences?
• Meat:
– As the fat content of ground beef and ground
turkey increases, the price per pound falls.
– “Family” packs of ground beef more likely to
be in higher fat varieties.
– Skinless poultry is more expensive than poultry
with skin.
Why do we observe these differences?
• Breads
– Figures actually represent the difference in the
price between a brand name commodity and a
store/generic brand.
– Cannot find 100% whole wheat products that
are store brands.
Differences by Store Type
Market Basket
Sacramento
Small
Bulk
Chain
Los Angeles
Small
Bulk
Chain
Healthy
501
357
421
Healthy
N/A
386
448
TFP
394
319
342
Least
Healthy
385
301
324
Difference
Healthy
& TFP
Percent
107
27
38
12
79
23
TFP
N/A
291
343
Least
Healthy
N/A
245
302
Healthy
& TFP
N/A
96
105
Percent
N/A
33
31
Additional Considerations
• If surveyor treated poorly by store personnel
(refused survey, followed), chain supermarket in
lower income neighborhood.
• If store was dirtier than usual, lacked 100% whole
wheat breads, produce not fresh, no organic
produce offered, or poor refrigeration, the store
was in a lower income neighborhood.
• Surveyors who shopped in small stores in lower
income neighborhoods more likely to say that
produce of good quality than P.I. who checked out
store.
Conclusions
• Healthier alternatives are more expensive
– Healthier market basket is up to one third more
expensive than the Thrifty Food Plan Basket.
• Majority of difference is that healthier
alternatives that are only available as name
brands, or in smaller sized packages.
• Remaining differences due to fat content in
meat and poultry. Higher fat products cost
less.