The Economics of Healthy Food Access
June 28, 2013
Guest post by Jessica Hersh-Ballering
The “Food Access and Economic Impacts: Trends and New Research” webinar – a joint effort of the Reinvestment Fund, the Food Trust, Policy Link, and the Robert Wood Johnson Foundation – was held June 27. The speakers included Dick Voith, senior vice president and principal of Econsult Solutions, and Lance Loethen, a research associate at the Reinvestment Fund.
Voith described the methods used to measure food access and its economic impacts, including multiplier analysis, economic impact analysis (EIA), fiscal impact analysis, and cost/benefit analysis. All these methods of analysis have the power to communicate the value of a project to policy makers, community members, and others. Voith commented that an ever-increasing number of government programs require economic analysis as part of their funding processes. “It’s just the way the world seems to be going,” he said.
According to Voith, the multiplier analysis is the simplest, most common, and most generic analysis. Designed to measure a project’s employment and economic activity (mostly earnings potential), multiplier analyses are valuable because they consider both direct and indirect project effects. In addition, multiplier analyses weight impacts on the local economy more heavily than impacts on the broader economy. Multiplier analyses are based on a type of economic model known as the “input/output model”; because input/output models are mostly available at the county level or larger, multiplier analyses for smaller geographic areas, such as neighborhoods, may not be possible. On the other end of the spectrum are cost/benefit analyses, which are the least commonly conducted and most costly type of economic analysis. Although cost/benefit analyses are considered the gold standard in the field, they are typically only used for large projects.
Both Voith and Loethen described the results of recent research. In a longitudinal analysis of the Brown’s ShopRite chain, Loethen found that while start-up costs were higher in urban settings than in suburban settings, there was no real difference in store operating costs between the two settings. This information may be useful to cities considering what type of incentives to offer to chains they want to bring to their neighborhoods. Voith’s research considered the impact of a new supermarket on nearby home values. He found that while houses less than a half mile from a new supermarket increased in value slightly, houses a half mile to one mile away increased in value significantly. This difference is likely due to an undesirable (from a homeowner’s perspective) increase in traffic that accompanies a new supermarket.
For more information about healthy food access and its economic impacts, visit the Healthy Food Access Portal, a joint project of the Reinvestment Fund, the Food Trust, and Policy Link. This portal is regularly updated with new information and upcoming events. You will also be able to find previous webinars (including the one described in this post) at this site.