measuring price differentials in food retail joseph llobrera gerald j. friedman fellow in nutrition...

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– Not an exact match, but comparable items

available

Measuring Food Availability and Price

• Market basket approach

• Cost of market baskets show combined effect of– Differences in item availability– Differences in item prices

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).

Food Item Availability at Large Stores

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Corn Flakes Cereal

SpaghettiWhite RiceWhite Bread

Bread Buns/Rolls

Ground BeefBeef, SteakBeef, RoastPork, HamPork, ChopPork, BaconPork, Sausage

Frankfurter, Wiener, Hot Dog

Bologna

Chicken Breast, Boneless, Skinless

Whole ChickenGround Turkey

Salmon Fillet or Steak

Fish Sticks of Fillet, Frozen

Fresh EggsLow Fat Milk

Cheddar Cheese, Chunk

Vanilla Ice CreamYogurt, Reduced Fat

AppleBanana

Apple JuiceApple Sauce

Orange Juice, 100%

Spinach, Bunch

Carrot, Loose or BaggedBroccoli, Head or Stalks

Green String Beans

White Potato

Tomato

Canned Tomatoes

Canned Green BeansCanned Refried BeansWhite Potatoes, Frozen

Broccoli, FrozenCarrots, FrozenCandy, Gumdrop

Fruit Jam/Jelly/Preserve

Margarine, TubSalad Dressing

Soy Milk

Potato ChipsCola, RegularBottled Water

Food Item

Availability

GRAINS PROTEINS DAIRY FRUITS VEGETABLES OTHER FOOD

Food Item Availability at Small Stores

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Corn Flakes Cereal

SpaghettiWhite RiceWhite Bread

Bread Buns/Rolls

Ground BeefBeef, SteakBeef, RoastPork, HamPork, ChopPork, BaconPork, Sausage

Frankfurter, Wiener, Hot Dog

Bologna

Chicken Breast, Boneless, Skinless

Whole ChickenGround Turkey

Salmon Fillet or Steak

Fish Sticks of Fillet, Frozen

Fresh EggsLow Fat Milk

Cheddar Cheese, Chunk

Vanilla Ice CreamYogurt, Reduced Fat

AppleBanana

Apple JuiceApple Sauce

Orange Juice, 100%

Spinach, Bunch

Carrot, Loose or BaggedBroccoli, Head or Stalks

Green String Beans

White Potato

Tomato

Canned Tomatoes

Canned Green BeansCanned Refried BeansWhite Potatoes, Frozen

Broccoli, FrozenCarrots, FrozenCandy, Gumdrop

Fruit Jam/Jelly/Preserve

Margarine, TubSalad Dressing

Soy Milk

Potato ChipsCola, RegularBottled Water

Food Item

Availability

GRAINS PROTEINS DAIRY FRUITS VEGETABLES OTHER FOOD

Ratio of Unit Price of Lowest Priced Item,Small Stores Relative to Large Stores*

1.00

1.20

1.40

1.60

1.80

2.00

2.20

2.40

2.60

2.80

3.00

Corn Flakes Cereal

SpaghettiWhite RiceWhite Bread

Bread Buns/Rolls

Ground BeefBeef, SteakBeef, RoastPork, HamPork, ChopPork, BaconPork, Sausage

Frankfurter, Wiener, Hot Dog

Bologna

Chicken Breast, Boneless, Skinless

Whole ChickenGround Turkey

Salmon Fillet or Steak

Fish Sticks of Fillet, Frozen

Fresh EggsLow Fat Milk

Cheddar Cheese, Chunk

Vanilla Ice CreamYogurt, Reduced Fat

AppleBanana

Apple JuiceApple Sauce

Orange Juice, 100%

Spinach, Bunch

Carrot, Loose or BaggedBroccoli, Head or Stalks

Green String Beans

White Potato

Tomato

Canned Tomatoes

Canned Green BeansCanned Refried BeansWhite Potatoes, Frozen

Broccoli, FrozenCarrots, FrozenCandy, Gumdrop

Fruit Jam/Jelly/Preserve

Margarine, TubSalad Dressing

Soy Milk

Potato ChipsCola, RegularBottled Water

Food Item

Ratio

*items available in at least 50% of each store type

GRAINS PROTEINS DAIRY FRUITS VEGETABLES OTHER FOOD

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

Total Price Difference

(1) Large Store Basket(2) 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

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

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

Total Price Difference

Pure Price Difference $1.18/lb+ +

Basket Composition Difference -$0.28/lb_____________________________________________Total Price Difference $0.90/lb

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

Thank you!

Thesis committee• Parke Wilde, PhD (Chair)• Beatrice Rogers, PhD• Ephraim Leibtag, PhD

Please send comments to:Joseph.Llobrera@tufts.edu