Article Urban Studies 2015, Vol. 52(5) 960–979 Ó Urban Studies Journal Limited 2014 Reprints and permissions: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/0042098014529340 usj.sagepub.com Fresh vegetable demand behaviour in an urban food desert Dave Weatherspoon Michigan State University, USA James Oehmke Michigan State University, USA Assa Dembele Michigan State University, USA Lorraine Weatherspoon Michigan State University, USA Abstract Food deserts are associated with lower quality diets and higher obesity rates. One hypothesis for their emergence is that retailers avoid food deserts because demand side factors such as low income limit demand for healthy foods. A competing hypothesis is that supply side factors cause prohibitively high costs of operation for grocers – leading to limited access to healthy foods and thus low expressed demand. The direction of causality has important implications for improving diets and health of food desert residents. This paper analyses Detroit food desert residents’ fresh vegetable purchasing behaviour using data from a non-profit grocer. The evidence confirms that these consumers respond to prices and income similarly to the average American, however, they face a different set of constraints. Both supply and demand side factors are at work – access problems are critical, but even with better access low incomes and other demand side issues limit vegetable consumption. Keywords demand elasticities, Detroit, food desert, fresh vegetable demand, healthy food demand Received February 2013; accepted February 2014 Introduction A food desert is often described as a location where there are few to no supermarkets or other retailers that offer fresh fruits and Corresponding author: Assa Dembele, Michigan State University, Agricultural, Food and Resource Economics, 213C Agriculture Hall, East Lansing, MI 48824-1039, USA. Email: [email protected]
Fresh vegetable demand behaviourin an urban food desert
Dave WeatherspoonMichigan State University, USA
James OehmkeMichigan State University, USA
Assa DembeleMichigan State University, USA
Lorraine WeatherspoonMichigan State University, USA
AbstractFood deserts are associated with lower quality diets and higher obesity rates. One hypothesis fortheir emergence is that retailers avoid food deserts because demand side factors such as lowincome limit demand for healthy foods. A competing hypothesis is that supply side factors causeprohibitively high costs of operation for grocers – leading to limited access to healthy foods andthus low expressed demand. The direction of causality has important implications for improvingdiets and health of food desert residents. This paper analyses Detroit food desert residents’ freshvegetable purchasing behaviour using data from a non-profit grocer. The evidence confirms thatthese consumers respond to prices and income similarly to the average American, however, theyface a different set of constraints. Both supply and demand side factors are at work – accessproblems are critical, but even with better access low incomes and other demand side issues limitvegetable consumption.
2011; Short et al., 2007).A competing hypothesis is that the lack
of expressed demand for healthy foods is
largely a consequence of living in a food
desert without access to supermarkets. The
lack of supermarkets is sometimes
explained as the consequence of supply side
factors leading to high costs of operating a
supermarket (Bitler and Haider, 2011),
such as high crime rates, unsatisfactory
transport infrastructure, or zoning impedi-
ments (Bitler and Haider, 2011; Guy et al.,
2004; Short et al., 2007). The paucity of
supermarkets in low-income neighbour-
hoods has been observed by several
authors, and the complications they pres-
ent to the inhabitants are many (Larson et
al., 2009; Short et al., 2007). Living in low-
income neighbourhoods has been shown to
be associated with poor dietary patterns
and higher obesity rates (Cassady et al.,
2007; Cummins and Macintyre, 2006;
Drewnowski and Specter, 2004; Larson et
al., 2009). Low availability and poor access
to supermarkets in such areas are cited as
important reasons for the disproportio-
nately high rates of overweight, obesity,
and their comorbidities among low-income
populations and certain ethnic minorities
in the United States (Larson et al., 2009;Morland et al., 2002).
The literature establishes a direct linkbetween vegetable prices and body massindex (BMI) (Powell and Chaloupka, 2009;Vernarelli et al., 2011). A number of studiesshow that residents of low-income areas withhigh rates of obesity pay higher prices, espe-cially for healthy foods (Cummins andMacintyre, 2006; Drewnowski and Specter,2004). This is of great concern because costand availability of healthy food may mediatethe relationships among neighbourhoodenvironment, diet quality, and obesity. It iswell established that fruits and vegetables areunder-consumed, and are related to healthand wellness issues for all Americans, butthe problem is even greater in low incomepopulations of colour, especially AfricanAmericans in urban areas such as Detroit(Gallagher, 2007; Grimm et al., 2010).
Residents of food deserts are 23.4% lesslikely to eat the recommended servings offruits and vegetables per day than are resi-dents with ready access to affordable fruitsand vegetables (Blanchard and Lyson,2006). The 2010 dietary guidelines forAmericans recommends consumption of atleast five servings of vegetables and fourservings of fruits per day (USDA andHHS, 2010); however, fewer than 1 in 10Americans meet their recommendations(Kimmons et al., 2009). In 2009, the per-centage of adults who consumed three ormore servings of vegetables per day was26.3% (Grimm et al., 2010). This could beaggravated in food deserts where access isalso a significant problem.
The debate about the direction of causal-ity – low demand for healthy foods causingfood deserts versus limited healthy foodaccess in food deserts causing low expresseddemand – has important policy implicationsfor improving diets and health of low-income, inner-city residents. Weatherspoonet al. (2013) state that part of the issue is thelack of understanding of urban food desertconsumers by retailers of all sizes and
Weatherspoon et al. 961
organisational structure. There has been adearth of economic analysis of the consumerhistory, trends, and limitations that wouldassist retailers in tailoring their formats toenhance the offerings of healthy food itemsin these areas. There are two primary rea-sons why this is the case. First, since fewsupermarket chains are located in theseareas, scanner data either do not exist or arenot available. Second, in most states, elec-tronic benefit transfer (EBT) card expendi-tures are not publicly available for consumerdemand analysis. Hence, there are few, ifany, sales data opportunities to analyse thepurchasing behaviour of food desert resi-dents. And, without data determining whereto locate and the appropriate product mix tooffer, it is difficult for retailers because theresimply is no information on latent demandfor healthy foods. Overall, the food desertliterature provides only limited testing of thesupply and demand side hypotheses becauseof these data constraints. This paper seeksto address this gap by using a unique datasetto quantify inner-city Detroit food desertconsumer preferences.
This study is an extension ofWeatherspoon et al. (2013), in which freshfruit price and expenditure elasticities ofdemand were estimated, that is, consumers’responsiveness in terms of quantity of freshfruits purchased with respect to price andincome changes. In that paper, consumers’price elasticity was found to be negative andsignificant, and of a similar magnitude aselasticities that have been estimated for theaverage American (compare to Durham andEales, 2010; You et al., 1996). A negativeprice elasticity of demand means that thedemand for a good decreases when its priceincreases. Low-income consumers’ sensitiv-ity to changes in income/expenditure wasfound to be positive and significant, indicat-ing that food desert consumers respondedto economic factors in the same manneras the general population. The main, and
unique, difference between the results inWeatherspoon et al. (2013) and previousstudies on consumer preferences (Durhamand Eales, 2010; compare to You et al., 1996)is that Weatherspoon et al. (2013) found thatseveral fruits were luxury goods in the studiedcommunity (in economic theory, goods areregarded as luxury goods when an incomeincrease causes a proportionally greaterincrease in demand (Theil, 1980)).
The paper at hand is critical in establish-ing food desert consumers’ vegetable pur-chasing behaviour, which is different enoughfrom fruit demand, studied in Weatherspoonet al. (2013), to warrant being examined sep-arately. While both fruit and vegetables areimportant for a healthy diet, fresh vegetablesmay be an even bigger challenge in fooddeserts and limited resource populationssuch as those living in Detroit, given the pre-paration and storage necessary. Most freshvegetables require refrigeration, preparationand/or cooking, whereas most fruit can beeaten raw and unprepared as snacks.Anderson et al. (1998) identified cookingtime as problematic in an intervention toincrease fruit and vegetable intake. Fruit aremostly sweet while vegetables come in a widerange of flavours and are rarely sweet andoften ‘bitter’. Both fruits and vegetables aregreat sources of nutrients, but it is alsoimportant to assess the consumption offruits and vegetables separately to bettertarget dietary and health shortcomingssince vegetables are higher in certain anti-oxidant nutrients and the recommenda-tions are less likely to be met by limitedresource populations than fruit (Cassady etal., 2007; Drewnowski, 2009; Kaur andKapoor, 2001; Scott et al., 1996; Trudeauet al., 1998). Therefore, the factors behindvegetable consumption preferences arelikely different from those for fruit(Trudeau et al., 1998).
This paper hypothesises that Detroitinner-city consumer behaviour with respect
962 Urban Studies 52(5)
to vegetables is similar to the averageAmerican’s behaviour in terms of price elas-ticities (responsiveness to price changes).Empirical falsification of this hypothesis –and in particular the finding that vegetableconsumption is low and non-responsive toprice changes – would be interpreted as sup-port for the demand hypothesis. Empiricalcorroboration of this hypothesis would beinterpreted as support for the supply hypoth-esis. The specific method is to econometri-cally estimate the income (expenditure)-,own- and cross-price elasticities of vegetablessold in one of Detroit’s food deserts andcompare them to national averages.
The next section will put the Detroit fooddesert setting in perspective. It is followed bythe data and methods sections. The resultssection presents empirical findings for thetop-selling vegetables, and interpretations ofthe findings. Conclusions and policy implica-tions are presented last.
Detroit’s food desert inperspective
Detroit is a salient example of an urban fooddesert – arguably America’s oldest and larg-est. With a total population of 713,777(82.7% African-American) in 2010 (USCensus Bureau, 2011), it is estimated thatone-half of the Detroit’s residents live in afood desert (Gray, 2008).
The city is characterised by a large incomedisparity, with a Gini coefficient of 0.488 6
0.01 (US Census Bureau, 2011), and a med-ian household income of $28,357 (2006–2010) as compared to the state of Michiganat $48,432 (US Census Bureau, 2011). Over34% of Detroit’s population lives below thepoverty level (US Census Bureau, 2011).
Detroit has an unemployment rate of22.7%, which is one of the highest in the US(Michigan Department of Technology,Management and Budget, 2010), and in2008 Forbes ranked the city among the top
10 fastest dying cities in America (Zumbrun,2008). Detroit has also been characterised asAmerica’s fifth most obese city (Centers forDisease Control, 2010; Ruiz, 2007).
Until recently, Detroit had no full-servicesupermarket chains operating within itsbounds. Gallagher (2007) estimated that in2007 gas stations, liquor stores, party stores,dollar stores, bakeries, pharmacies, and con-venience stores, offering a limited, if any,choice of nutritious foods, comprised 92%of Detroit’s food stamp retailers. In 2013,two supermarket chain stores (Whole Foodsand Meijer) opened within the city bound-aries. Given the vast geographical expanseof Detroit (139 square miles with 40 squaremiles of vacant land (Gallagher, 2009)) andthe poor public transportation system, themajority of inner-city Detroit consumers arestill forced to shop at non-mainstream gro-cery outlets, such as convenience and liquorstores.
Detroit’s inadequate public transporta-tion system exacerbates its food access prob-lems – a light rail train covers only theimmediate downtown area, and a limitednumber of bus routes link the centre to themore affluent suburban food oases. Eachshopping trip provides an inconvenience tothe consumer, as it requires walking to andfrom a bus stop, transferring, and carryingbags. The lack of adequate transportation isespecially problematic given Detroit’s highproportion of disabled persons – 19.5% ascompared to the 11.9% found in the rest ofthe US (US Census Bureau, 2011) – as thispopulation is more likely to have difficultygrocery shopping, especially if major travel-ling is required.
Vegetable intake by Detroit residents hasbeen shown to be below the recommendedlevels for average Americans – 77.2% of itsresidents are not consuming adequate fruitand vegetables (Fussman et al., 2008). Theinability to purchase fresh vegetables andother affordable, nutritious food is perhaps
Weatherspoon et al. 963
the most significant factor contributing tounhealthy diets in Detroit. More specificallyconsumption was lower in neighbourhoodsthat did not have an increased variety ofdark-green and orange vegetables availableat the stores when compared with those thathad five or more varieties (Izumi et al.,2011).
The study area, Piety Hill, is a 92%African-American, inner-city Detroit neigh-bourhood, roughly bounded by John C.Lodge Freeway, Clairmount Street,Woodward Avenue and Euclid Street (seeFigure 1). The approximately 1635 residents(US Census Bureau, 2011) span all ages,from young singles, to families, to senior citi-zens. Piety Hill’s mean income is lower thanthat of 96% of US neighbourhoods; itschildhood poverty rate of 38% is higher
than for 90% of US neighbourhoods(NeighborhoodScout.com, n.d.). A microcustom report (MAPAS) for the ¼ mileradius circle centred in the neighbourhoodrevealed a poverty rate that exceeds 60% forthe 18–64 year age group. Only 20% ofthe population holds an associate’s degreeor higher, and 27% of the population neitherfinished high school nor obtained a GeneralEquivalency Diploma (MAPAS, n.d.).Reported violent crime rates are three timesthe Detroit average and over 11 times thenational average (NeighborhoodScout.com,n.d.). Prior to the introduction of Peaches &Greens (P&G) in November 2008, the imme-diate neighbourhood’s single food retail out-let was a windowless, gated corner store witha single sign that advertised liquor, beer,wine, and lotto tickets. At the time of data
Figure 1. Map of Detroit and the Piety Hill study area.
964 Urban Studies 52(5)
collection, it took 56 minutes by bus fromthe study site to reach a full service super-market chain (according to Google maps),while 49% of households did not own a car(NeighborhoodScout.com, n.d.). There is anindependent grocer within one mile of P&Gthat has upgraded its FFV category sincethese data were collected.
Data
A natural experiment, consisting of theopening of a non-profit green grocer, P&G,in the former food desert of Piety Hill, pro-vided the opportunity to explore food desertresidents’ consumption behaviour. The smallFFV retail storefront, which opened on 1November 2008, was the result of commu-nity leadership and financed by CentralDetroit Christian, a community based orga-nisation. It provides community residentsthe opportunity to have a safe, culturallyacceptable, nutritionally adequate dietthrough a sustainable food system that max-imises community self-reliance. The goalwas to provide families with greater accessto quality produce while promoting healthyfood choices (Central Detroit Christian,n.d.).
P&G sales receipts were provided fromJuly 2009 to November 2011. The dataincluded quantity, price, date, time, andtransaction number for 13 vegetables.1
During this time period, the store was open123 calendar weeks, or 570 days, and made aweekly average revenue from FFV of $187.On average, 109 transactions at $2 eachoccurred each week. Average weekly salesfigures of FFV by month are presented inTable 1. These figures suggest that Piety Hillresidents are taking advantage of P&G FFVofferings.2 The table also shows that vegeta-ble sales make up only 19% of total FFVsales. In other words, for every vegetablethat is purchased approximately 4.3 fruit arepurchased. This is quite different from the
shares consumed by the average American:1.15 lbs of fresh vegetables consumed forevery pound of fresh fruit (Cook, 2012), orthe 1.64 cups of vegetables for every cup offruit (NFVA, 2010). Apart from preferences,we hypothesise that relative under-utilisationof fresh vegetables is related to storage andpreparation issues facing residents withoutcooking or refrigeration facilities. In a com-panion survey,3 48% of interviewees men-tioned their inability to cook or storeproduce as the major impediment to FFVconsumption (Weatherspoon et al., 2014).This seems to be corroborated by the factthat the top selling vegetables (and fruits)are all easy to consume and require no cook-ing and little or no preparation.
Weatherspoon et al. (2012) determinedthat Detroit’s food desert consumers hadsimilar fruit and vegetable purchasing pre-ferences as the average American consumer:seven of the ten nationally most purchasedfruits were also top sellers in their samplepopulation. Similarly, tomato, pepper, let-tuce, cucumber, carrot, cabbage and cornwere among the top 10 in the examined fooddesert and nationally.
Table 2 provides weekly average quanti-ties sold and average prices for the individ-ual vegetables. The most frequently soldvegetables each week were tomatoes (sold113 weeks or 92% of the time), peppers (sold100 weeks or 81% of the time), and lettuce(sold 95 weeks or 77% of the time) at aver-age prices of $0.76 a piece for tomatoes,$0.55 a piece for peppers, and $1.17 per headof lettuce. The average transaction (basedon weekly averages) consisted of 1.97 toma-toes, 1.64 peppers and 1.05 heads of lettuce.
During the data collection period, theFair Food Network (2012) managed a pro-gramme, in which P&G participated, calledDouble-Up Food Bucks (DUFB). To qua-lify for this programme customers had to berecipients of the Supplemental NutritionAssistance Program (SNAP). DUFB
Weatherspoon et al. 965
participants received coupons worth up to$20 that could be redeemed at participatingretailers for Michigan produce with a pur-chase of Michigan produce of the samevalue. For example, for a $2 purchase theconsumer would pay $1 and the couponwould match that $1. This programmeessentially doubled the amount of incomeavailable for Michigan FFV purchases. Theprogramme ran in June and July 2011.Comparing data from June and July 2010(no DUFB) with data from June and July
2011 (DUFB was operating) the impact canbe clearly seen. Fruit purchases in valueterms increased by 67% year-over-year,vegetable purchases increased by 6%, andcombined purchases increased by 56% asshown in Figure 2 (including cash and cou-pon value). In contrast, comparing monthswhen DUFB was not operating (May andAugust year-over-year comparisons), com-bined FFV purchases increased only nomin-ally. During the time the programme was inplace in 2011, transactions increased by
Table 1. Average weekly revenue, number of units sold and number of transactions per month,2009–2011.
Month Average weekly revenue Average number of units sold/week Averagenumber oftransactions/week
nearly 30%, and the average spend pertransaction by 18%, compared to the sameweeks in the previous year. This finding reaf-firms Gustavsen and Rickertsen’s (2006)conclusion that income support could playan important, but limited, role in increasingthe vegetable consumption of low-incomeconsumers. It also echoes Anderson et al.(1998), who found that, during their inter-vention to increase fruit and vegetable con-sumption, cost and lack of ease of shoppingwere an important impediment, and con-cluded that addressing these issues could bebeneficial for future programmes.
Overall, the sales numbers from P&Gshow that food desert consumers purchaseFFV if offered a quality product at a com-petitive price.4 This finding is consistent withthe results of Wrigley et al. (2003) who alsofound increased FFV consumption in a pre-viously underserved neighbourhood in theUnited Kingdom after the introduction of anew food retailer. Bodor et al. (2007) alsosuggest that small neighbourhood stores thatsell fresh produce can help attenuate theseverity of the access problem among localresidents in urban food deserts. In their NewOrleans study, vegetable consumptionincreased when small neighbourhood storesoffered healthy food options within 100metres of the household. An additionalmetre of shelf space was associated with anincrease by 0.35 servings of vegetables con-sumed per day. Rose and Richards (2004)who examined food store access and house-hold fruit and vegetable consumption amongindividuals receiving food stamps showed anincreased consumption of fruits and vegeta-bles among individuals who travelled onlyone versus five miles to reach a store.
In this study, the outcome of concern isthe relatively low rate of vegetable comparedto fruit purchases, contrary to the US diet-ary guidelines, which recommend the oppo-site. As noted earlier, vegetables are key to abalanced diet, provide certain antioxidants
and nutrients and contain less sugar thanfruit (Cassady et al., 2007; Drewnowski andSpecter, 2004; Kaur and Kapoor, 2001;Scott et al., 1996; Trudeau et al., 1998).Given the strong established negative associ-ation between fresh fruit and vegetables anddiet-related disease, it is imperative that thisshortcoming be addressed from an access aswell as demand perspective.
Method of analysis: Rotterdammodel
The Rotterdam model has been widelyapplied to consumer demand studies andwas first applied to consumer demand prob-lems in the mid to late 1960s (Barten, 1964,1968, 1977; Theil, 1965, 1975, 1976). Theadvantages of the Rotterdam model overother approaches (translog and AIDS mod-els) are: its direct derivation from economictheory, theoretical restrictions are easilyimposed, first differencing the variableseliminates unit root and other problemscommonly found in time series data, and themodel is relatively easy to estimate andinterpret.
Following Weatherspoon et al. (2013),this study utilises a system wide Rotterdamapproach and is estimated in the absoluteprice form (Theil, 1980). It relies on multi-stage budgeting under the assumption ofblock independence (Theil, 1976, 1980) orweak separability (Barten, 1977). Underblock independence it is assumed that consu-mers allocate income independently amongbroad groups of goods, which are taken tobe additively separable. Accordingly, theconsumers’ utility functions are also additivein groups Sg, g = 1, ., n. The demand forgood i in group Sg can then be derived con-ditionally on the demand for the group. Inthe final stage expenditure on the group istaken to be predetermined and the goods arenot assumed to be separable within thegroup, so that cross-price elasticities are
968 Urban Studies 52(5)
relevant. For example consumers allocateincome among food, transportation, educa-tion, and so on (stage 1), and within thefood group, in turn, among FFV, meat, andother foods (stage 2). In stage 3 the predeter-mined expenditure on the vegetables groupis allocated among individual vegetables,such as lettuce and cucumbers.
The Rotterdam model is usually applied asa differenced system of equations to addressnon-stationarity. The conditional demandequation for vegetables can be written as fol-lows (time subscripts are suppressed):
wi log qi = ui logQ+X
jpij log pj ð1Þ
where i, j 2 1, . . . ,Nf g are indexes of freshvegetable (FV) products; wi = piqi=x is theexpenditure share for product i; x=
Pi piqi
is (nominal) expenditure; qi = (qi, ., qN) isa vector of product quantities demanded; ui
is the expenditure parameter relatingincreases in vegetable expenditure to pur-chases of vegetable product i, logQ=P
i wi log qi is the Divisia quantity index;5 pij
is the (conditional) Slutsky price parametermeasuring the effect of price j on purchasesof product i; and pi = (p1, ., pN) is a vectorof retail prices. Expenditure and price para-meters ui and pij are assumed to be constant.
The theoretical demand restrictions in theRotterdam model are as follows (Mountain,1988):
HomogeneityX
jpij = 0
Symmetry pij =pji
Adding-upX
ipij = 0 and
Xiui = 1
The conditional average expenditure elas-ticity is calculated as hi = ui=wi. The condi-tional average Slutsky (compensated) priceelasticities (sij) are calculated as: sij =pij
�wi.
Conditional average Cournot (uncompen-sated) elasticities are calculated as:
eij =pij
�wi � ui=wið Þ � wj. All elasticities are
calculated at sample means.To operationalise the model, the data
were aggregated by calendar week in orderto minimise the number of zeroes due tonon-expenditures on specific vegetables dur-ing a given transaction. The weekly aggre-gate q, p and Q were divided by the numberof transactions for that week so that the esti-mation was based on the weekly averageconsumer. This resulted in a dataset withT = 121 weekly observations. The modelwas then estimated for the three most fre-quently sold vegetables (tomatoes, peppersand lettuce) in a 4-equation system (thefourth equation being other vegetables). Thefourth equation was dropped for estimationpurposes to avoid singularity of the errorcovariance matrix (Barnett, 1979; Barten,1969). The parameters for the fourth equa-tion were recovered using the theoreticaldemand restrictions listed above. The actualnumber of observations for the operationa-lised model was 62 due to differencing andthe absence of purchases of tomatoes, pep-pers or lettuce in some weeks. The modelwas estimated in STATA (www.stata.com)with nonlinear seemingly unrelated regres-sion (nlsur), which converges to maximumlikelihood under the iterated feasible gener-alised nonlinear least squares (ifgnls) option(Poi, 2008).
Results
Model performance
The model was estimated for the three mostfrequently sold vegetables (tomato, pepperand lettuce) and all ‘other vegetables’. Aseries of tests were run on the data to deter-mine seasonality, randomness of missingweeks, and model fit to data. Seasonalitywas not found to be significant in any modelformulation (monthly and quarterly dum-mies were tested). Randomness of missingweeks for the time series was tested with
Weatherspoon et al. 969
logit models of missing-value-indicator vari-ables and time variables following SocialScience Computing Cooperative (2013).Pepper was the only variable in the modelthat showed a slight association in missingvalues with time – however, there was noseasonal (or any) pattern detected, otherthan the number of zero sales increasing inAugust and September of 2011.6 In 2009, forwhich data were only available starting inJuly, there were only two weeks where pep-per was not sold at all. ‘This imbalance’ inmissing values for pepper between 2009 and2011 caused the slight positive associationwith time. However, as stated above, notrend was apparent. Year-over-year compar-ison of pepper missing values (quarterly,monthly, and weekly) showed no patternand within-year distribution of pepper non-sales was independent of time. When otherexplanatory variables (such as vegetablequantities and prices) were included in thelogit model, the time variables tested (week,month) were not significant for predictingthe likelihood of incurring a pepper (or any)missing value. A likelihood ratio test showedthis model performed better than the nested2-product model at the 1% level, while theparameter estimates and their significancelevels were quite close. Hence, the selectedmodel includes pepper.
Homogeneity and symmetry conditionsfor the three vegetable model were tested fol-lowing Seale et al. (1992); neither homogene-ity nor symmetry could be rejected.Therefore, homogeneity and symmetry wereimposed in addition to the adding-up condi-tion, leading to 53 degrees of freedom. Thelog likelihood value of this model was375.44. A Wald test was performed to testthe significance of the model. The jointhypothesis of all parameters being equal tozero could be rejected at the 1% level(chi2(9) = 290.36). The system-wide R2 of0.65 was calculated following Schmitz andSeale (2002) and Seale et al. (1992). Inaccord with economic theory, the own priceparameters were all negative and significant,with the exception of ‘other vegetables’, andthe expenditure parameters were positive andsignificant. Overall, 10 of the 14 estimatedparameters were statistically significant.
Expenditure parameters and elasticities
The (conditional) expenditure parametersare reported in column 6 of Table 3. Theexpenditure parameters (Table 3) and elasti-cities (Table 4) for lettuce, peppers, tomatoesand ‘other vegetables’ were positive and sta-tistically significant at the 1% level. Tomatoand pepper expenditure elasticities were 1.59
Table 3. Rotterdam model parameter estimates with homogeneity, symmetry, and adding up imposed.
Other 20.0174896 0.3898825***(0.0201996) (0.0561827)
Note: Standard errors are reported in parentheses, ***p \ 0.01; **p \ 0.05.
970 Urban Studies 52(5)
and 1.46 respectively, making both luxurygoods for this community. This means thatas the consumers’ income available for thevegetable category increases by 1%, theirpurchases of the luxury vegetable willincrease by more than 1% (Theil, 1980).Lettuce and ‘other vegetables’ expenditureelasticities put them in the ‘normal good’category, with expenditure elasticities of 0.63and 0.71 respectively. The lettuce expendi-ture elasticity is similar to what You et al.(1996) estimated nationally, however, thePiety Hill elasticities were much higher fortomato and pepper. This means that fortomatoes and peppers the Piety Hill consu-mers are more income sensitive, that is, anincrease in income available for vegetablepurchases results in a higher increase indemand by Piety Hill residents for tomatoesand peppers than for the general population.
A likely explanation for the high incomeelasticity of tomato and pepper may centreon the very low income distribution inthe locality. At the lowest income levelsconsumers may be searching for high-caloric food in order to not feel hungry, andseek to purchase low-cost bulk vegetables(Drewnowski, 2009; Drewnowski andSpecter, 2004) that can be used in cold andhot preparations. Thus the high income elas-ticity of fresh peppers and tomatoes atextremely low income elasticities is intui-tively plausible.
One implication of this finding is thatincome support programmes for this popu-lation may be important in influencing theirvegetable consumption. Programmes such asDouble-Up Food Bucks effectively increaseincome because they act like a buy-one-get-one-free coupon. During the implementation
Other 0.0365758 20.0177828 0.0128728 20.0316658(0.0279255) (0.0261806) (0.0107837) (0.0365726)
Note: Standard errors are reported in parentheses, ***p \ 0.01; **p \ 0.05; *p \ 0.1.
Weatherspoon et al. 971
of DUFB vegetable purchases (in valueterms) increased by 6%. This shows thatincome support can play a limited role inincreasing the vegetable consumption oflow-income consumers. Other constraints onvegetable consumption, such as limitedcooking and refrigeration capabilities, needto be addressed at the same time in order forincome support programmes to achieve theirfull effect.
Price parameters and elasticities
The conditional Slutsky price parameters arereported in columns 2–5 of Table 3. All esti-mated own price parameters were negative,as expected (this means a price increase leadsto a decrease in the quantity demanded ofthat good and vice versa). Tomato, pepperand lettuce own price parameters and elasti-cities were statistically significant at the 1%level. The own price of all ‘other vegetables’was not significant.
Two types of elasticities can be calculatedfrom Slutsky parameters: Slutsky andCournot elasticities. Slutsky (compensated)elasticities represent pure substitution effectswhile Cournot (uncompensated) elasticitiescomprise both income and substitutioneffects (Frisch, 1959). The substitution effectcharacterises the change in demand for agood whose price has increased (decreased)due to the replacement with another, rela-tively cheaper (more expensive), substitutegood (Hicks, 1939). For example, if the priceof wheat bread increases, consumers mightbuy rye bread instead and thus the demandfor wheat bread decreases. The income effectdescribes the indirect effect of a price changeon disposable income of a consumer: if theprice of a good increases, the consumer notonly has to pay a higher price for that good,but (s)he also effectively has less disposableincome available to buy goods (Hicks, 1939).For example, when gas prices increase,
consumers who drive a vehicle have lessmoney available to purchase other goods,such as food, clothes and so on whose priceshave not changed. Thus their original basketof goods is not attainable anymore and theyeffectively have less income available. Theuse of Slutsky and Cournot elasticities allowsus to isolate these two effects, as Slutskyelasticities only reflect substitution effectswhile Cournot elasticities comprise the entireeffect, including the indirect income effect, ofa price change on demand. The smaller theincome effect, the closer the two measuresare, and if there is no income effect at allthey coincide.
The elasticities are reported in Table 4and were calculated at the sample mean.Tomato, pepper and lettuce own priceSlutsky elasticities were negative and statisti-cally significant at the 1% level. A 1%decrease in own price would lead to 0.42%increase in tomato purchases, a 0.73%increase in pepper purchases and a 0.57%increase in lettuce purchases. All elasticitiesare in the inelastic range, that is, a 1% pricechange leads to a less than 1% demandchange, meaning the demand response,given the price change, is relatively weak.The Slutsky own price elasticity for all ‘othervegetables’ was very small and not statisti-cally significant, indicating that their ownprice is not important in the purchasingdecision.
Cournot own price elasticities (Table 4)were negative and significant at the 1% levelfor all vegetables. The Cournot own priceelasticity was markedly larger, in absoluteterms, than the respective Slutsky elasticityfor each vegetable. This indicates a substan-tial income effect as already discussed in theprevious section, and therefore underlinesthe importance of income in this community.However, all elasticities still remained in theinelastic range indicating a less than propor-tional demand response. Specifically, if their
972 Urban Studies 52(5)
own price decreased by 1%, tomato con-sumption would increase by 0.81%, pepperconsumption by 0.88%, lettuce consumptionby 0.63%, and consumption of all ‘othervegetables’ would increase by 0.42%. Theseown price responses were in the same orderof magnitude as the ones found by You et al.(1996, 1998). However, while they were stillin the inelastic range, they were much largerfor Detroit food desert consumers than thoseestimated in the aforementioned study. Thismeans that, with respect to the vegetablegroup, food desert consumers are more pricesensitive than the average American, and theprimary reason for this difference is the highincome effect.
Slutsky cross-price parameters (Table 3)characterise cross-relationships betweengoods – that is, how the demand for a goodresponds to a price change in another good.The tomato–pepper and tomato–lettucecoefficients were positive and significant atthe 1% level and the pepper–lettuce coeffi-cient was positive and significant at the 5%level, indicating that these goods are net sub-stitutes. This means that consumers regardthese vegetables as alternatives to each other(e.g. tomatoes and pepper), and a priceincrease in one (e.g. tomatoes), will lead to ademand increase in the other (pepper)(because peppers have become cheaper rela-tive to tomatoes). The Slutsky cross priceselasticities are reported in Table 4.
Nine Cournot cross price elasticities weresignificant. The tomato–lettuce cross priceelasticity was negative and significant at the10% level, indicating a gross complementaryrelationship which is just the opposite forwhat was found for the Slutsky cross-priceelasticity. ‘Other vegetables’ were found tobe gross complements for tomatoes, peppersand lettuce (all significant at the 5% level).Complements are goods whose demandresponses move in the same direction (e.g. aprice increase in tomatoes leads to a decreasein purchases of both tomatoes and lettuce).
Generally, complements are goods that com-plement each other and are bought and con-sumed together. It is, however, possible forgoods to be net substitutes and gross com-plements, as in this case. This is a result ofthe income effect being larger than the sub-stitution effect. Even if consumers substitutelettuce for tomatoes, an increase in thetomato price has such a large effect on theirdisposable income (or food budget), thatthey cannot afford as much lettuce as theydid prior to the tomato price increase – theincome effect outweighs the substitutioneffect. The pepper–tomato and lettuce–pepper combinations were both positive andsignificant at the 10% level, suggesting grosssubstitutes. This means that the incomeeffect is not large enough to change theSlutsky elasticity relationships.
Conclusions
This paper provides unique evidence oninner-city Detroit residents’ fresh vegetablepurchasing behaviour by using retail-leveldata from a natural experiment in Detroit.While this natural experiment is unique,quantifying its effects through estimatedprice and income elasticities allows for gener-alisation to policies and retail strategies thatwould affect inner-city vegetable prices andthe allocation of consumer expenditures.
The findings provide evidence confirmingthat inner-city consumers respond to vegeta-ble prices and income constraints in muchthe same way as the average American. Thismeans that their underlying preferences asrepresented by elasticities of demand are notmarkedly different from the averageAmerican, that is, barring constraints theywould purchase in similar patterns as thegeneral population. This evidence corrobo-rates the supply hypothesis – namely thatinner-city residents consume low levels offresh vegetables in part because they do nothave access to fresh vegetables.
Weatherspoon et al. 973
However, the low levels of income, vege-table purchases, and the significant esti-mated income and own price elasticities alsoprovide corroboration of a modified demandhypothesis. Namely that due to income andpossibly other, non-economic, constraints,including inadequate household storage andpreparation capacity, the consumption ofvegetables in inner city food desert situationswill remain lower than national averages.That is, if total vegetable costs are loweredfor these consumers,7 they will purchasevegetables at an increased but still limitedrate. In this sense, food desert residents aredifferent from the average American –because they face a different set of con-straints. Thus, the conclusion to be drawn isthat two insidious effects are at work – lim-ited access limits fresh vegetable consump-tion, but even with better access low incomesas well as other issues will further constrainfresh vegetable consumption.
The data show that vegetables are pur-chased at significantly lower rates than fruitin the study neighbourhood. Analysisregarding fruit previously showed that whilethe cost of fruit was a major determinant offruit consumption, there was demand despitethe limited access (Weatherspoon et al.,2013). The current paper highlights theadded burden of non-economic constraints,such as taste preferences, preparation andstorage, for vegetables relative to fruit whichis of particular concern because of theimportance of adequate consumption ofboth fruit and vegetables for a healthy diet.
For retailers the large price elasticities forcertain vegetables imply that coupons anddiscounts on individual vegetables could sig-nificantly increase their respective purchases.Grocery stores can increase sales of moreperishable vegetables or vegetables close toperishing by markedly discounting them.Furthermore, changing prices in either direc-tion can have large effects and should there-fore be carefully considered. Price and
income incentives need to be carefullydesigned with cross price relationships inmind in order to benefit from positivedemand effects on complements and avoidnegative effects on substitutes. By reducingthe price of a good, demand will increase forits complements as well. On the other hand,a price increase for a certain item can have anegative impact on sales of a substitute.Given the considerable income effects in thisfood desert community, reducing the priceof a frequently purchased vegetable couldincrease overall vegetable category pur-chases. In this specific case, for example,P&G could use tomatoes as a loss leader toincrease purchases of not only tomatoes, butalso lettuce and all other vegetables (andwould have to accept a slight decrease inpepper sales in return).
The large income elasticities imply thatvegetable coupons, discounts and customerloyalty programmes that implicitly raiseincome available for the vegetable categorymay have a positive impact on vegetablesales revenue. However, other constraints onvegetable consumption, such as limitedcooking and refrigeration capabilities, needto be addressed at the same time in order forthese retail strategies to achieve their fulleffect. The co-CEO of Whole Foods hasrecognised some of these issues within a cou-ple of months of operating in the Midtownarea of Detroit:
We’re trying to see what works and how wecan help. Our (food stamp customers) aremuch higher here, three to four times higherthan the rest of the region. I’m glad about it.It makes me happy that we’re able to stretch a
bit. (Gallagher, 2013)
By offering fresh vegetables in a more conve-nient manner – for example pre-prepared oras snacks – and carrying vegetables thatrequire little preparation, grocery stores caneliminate part of the preparation/cookingissue. A greater selection of vegetables with
974 Urban Studies 52(5)
longer shelf lives could alleviate storage andrefrigeration problems. Strategies such asthese could address some of the constraintsmany customers in this area face. As thesefood desert residents were shown to havesimilar preferences as the average American,fresh produce may in fact even provide aprofit opportunity in this and similarlocations.
These results also have major public pol-icy implications for urban food desert areas:the public sector has an important role inaddressing the non-economic constraints.Improving access to competitively pricedvegetables of good quality may be a partialsolution that is not too difficult to accom-plish. The opening of P&G in Piety Hilleffectively reduced both the local retail priceand the overall cost of vegetables, by lower-ing the transaction costs for residents withpreviously latent demand. The existing retai-ler near the neighbourhood also increased itsfresh produce selection after the openingand initial success of P&G. Public policyactions including improving public safety,nutrition education, and providing favour-able zoning and other retailer incentives canhelp to increase the number of retailers thatoffer vegetables, reduce prices, increase vege-table quality, and thereby increase consump-tion. More research is needed to determine ifthere are public policy actions, such asincluding educational programmes onproper methods for freezing vegetables, thatcan specifically target storage and prepara-tion constraints.
Other policy options that lower vegetableprices are difficult. Option 1, directly subsi-dising vegetables in inner-city neighbour-hoods is problematic both logistically and ina political environment in which food assis-tance is perhaps the biggest issue in the 2014Farm Bill debate. In Detroit, 28% of thepopulation receives food assistance in theform of EBT cards (Devries and Linn,2011). Analysis of the Double Up Food
Bucks trial run showed that income supportprogrammes for vegetable purchases canplay an important role in increasing thevegetable consumption of low-income con-sumers, but their impact is heavily limitedby the aforementioned non-economic con-straints. Option 2, providing tax rebates fornew or renovated commercial constructionin renaissance zones might help, but Detroithas had a comprehensive programme inplace with minimal or no effect on retailfood outlets, and Detroit’s current budget-ary status and state-appointed special man-ager (essentially receivership) raise questionsabout the future of tax abatements. In othermajor cities, such as New York, tax abate-ments may be reduced or eliminated depend-ing on proportion of retail in the newconstruction area (New York CityDepartment of Finance, 2013), limiting theirapplicability for increasing access to freshproduce. Option 3, improving transporta-tion may also help, although budgetaryissues arise as well. Lastly, public–privatepartnerships are an option, as in the success-ful Pennsylvania Fresh Food FinancingInitiative (FFFI), yet the FFFI includedpublic financing that may not be available inDetroit.
Devising appropriate vegetable retailerstrategies and public policies requires furtherresearch to understand food desert consu-mers’ constraints and preferences and howthese strategies and policies impact con-sumer purchasing decisions. It appears thatincome, storage and preparation issues, andother constraints, are likely playing animportant role and need to be addressed.This study implies that access is critical, butthat there are additional concerns that inhi-bit increased purchases of fresh vegetables.Therefore, it is important that policymakersfocus their efforts on identifying and target-ing obstacles in conjunction with pricingstrategies and income support to increasevegetable consumption.
Weatherspoon et al. 975
Funding
The authors would like to thank the Morris Chairin State and Local Government Finance andPolicy at Michigan State University for fundingthe data collection and analysis for this study.
Notes
1. P&G also sells fruit and miscellaneous gro-ceries such as eggs, but these were notincluded in the analysis.
2. Assuming all transactions are independent,this would mean that approximately 7% ofresidents obtain their vegetables at this lim-ited offerings store.
3. A survey instrument was designed to gatherinformation on household characteristics,environmental characteristics, food accessand affordability, and food consumption pat-terns. The household characteristic questionsincluded demographic (household size, com-position, age, etc.), food storage and prepara-tion ability, tastes and preferences, perceptionof food consumption adequacy relative tohealthy levels, shopping frequency, accessand affordability questions related to avail-ability and quality of FFV, transportationoptions, and income (employment and other).Environmental characteristics included dis-tance to nearest food store, ease of access toresidents’ three most preferred stores, per-ceived safety in travel to the store, ability tostore and prepare fruit and vegetables, andaccess to public transportation, among oth-ers. Food access and affordability questionsincluded directly asking about fruit and vege-table affordability, questions relating toreduced fruit and vegetable consumption dueto price/income issues, food quality, and useof food assistance (governmental and non-
governmental). Food consumption patternswere surveyed by including the fruit and vege-table food frequency component of theNHANES instrument.
4. During this study the authors examined theFFV quality at convenience stores, gas sta-tions, liquor stores and the independent gro-cer in the area for comparison purposes. TheP&G FFV were fresher and the pricing con-stituted a small markup over the largest FFV
wholesale market in Detroit, the EasternMarket, relative to other inner-city sources ofproduce. The lower quality of Detroit pro-duce has also been recognised in broaderstudies. In Detroit and New Haven, producequality is lower in low-income communitiesof colour compared to more affluent orracially mixed neighbourhoods (Treuhaft andKarpyn, 2010).
5. The Divisia quantity index can also be inter-preted as the logarithmic change in moneyincome deflated by the price index as derived
by Theil (1980).6. In August 2011, for example, peppers were
sold only every other week. However, due totaking the log and first differencing, thisresulted in missing values for all of August2011. This was unique to August 2011.
7. By definition, food deserts present higheraccess costs than non-food desert locations.This, coupled with the argument that thequality of FFV sold in these areas is usuallypoor, results in the true costs for fresh pro-duce in these areas being much higher for anaverage quality vegetable.
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