measuring price differentials in food retail joseph llobrera gerald j. friedman fellow in nutrition...
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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:[email protected]