Essay How Food Supplying Firms Affect Households

934 Words Dec 21st, 2015 4 Pages
There are several ways which food supplying firms affect households. The household can relocate to an area with a different retail environment; the stores in the neighborhood can change their products, and firms can either leave a neighborhood or enter a new one. When location was controlled for, that was only a marginal difference in expenditure and nutrition scores when lower socioeconomic groups were placed in locations with more healthful options. Stores that change their products often do not change them in accordance to a communities tastes rapidly changing, but would rather enter an entirely new market; community tastes rarely undergo such dramatic shifts in short periods of time. It was observed that households did in fact change where they shopped when a new firm entered their market, but it did not change the healthfulness of the foods they purchased. Store entry decisions are endogenous to local demand conditions. A profit-maximizing firm will seek the most profitable location; it is expected food purchases will react more strongly to entry and exit that we actually observe than to entry and exit that is induced by policies that ignore local demand. There is a minimal response of household purchases to changes in access; it is expected household purchases to access-improvement policies are even more limited.
Overall, the data results indicate that the nutritional quality of household purchases responds very little, if at all, to changes in retail environments.…

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