“Food desert.” When I hear that phrase I think of nomads riding bactrian camels across the Nefud in search of ancient grains. But, according to the U.S. Department of Agriculture, it means that you live more than one mile from a store that sells fresh produce or meat. Hardly the image most of us in tree-covered suburbia think of as a desert.
The term, which has only been around about 25 years since being coined in the U.K., has recently attracted the attention of many local politicians who believe they can “out zone” free market forces. Unfortunately for them, Adam Smith’s invisible hand usually tends to win in these situations.
The controversy started several years ago when all the cool kids decided that Walmarts were bad for communities. Using various forms of convoluted reasoning, many local governments essentially banned large super stores by enacting zoning size limits. Too big was bad. The stated goal was typically to save small stores from the competition of large, more cost-efficient national chains.
Let’s be honest, love or hate Walmart, Target or other discount stores, we all shop there — either occasionally or often. Why? Price. We can make our paychecks go farther because especially Walmart, by virtue of its size, can sell products — groceries — for less. The perhaps well-meaning local politicians that are often claiming to want to help the poor, keep lower-priced goods zoned out of their reach.
Now, enter the latest round of social zoning. Dollar stores. Several communities are now zoning against size again, but this time in reverse. Now small is bad. The elimination of big box stores has left the market for small box stores — typically of 15,000 square feet or less — wide open. And, in a free market, efficient operators beat inefficient ones every time. The response has been to now enact minimum size zoning regulations. But this time there’s a new twist in the logic.
Enter food deserts. Now, politicians in cities like Tulsa and Birmingham are protecting the poor by keeping out stores like Dollar General. These misguided policies claim that by limiting (or eliminating) national dollar-type stores, people will eat more nutritious food. Apparently, the canned and frozen goods sold by these low-cost stores aren’t healthy enough compared to the fresh produce and meats sold by larger grocers. Except those were zoned out existence years ago, remember?
People living in low-income neighborhoods are now living in food deserts. Stores that are big with low prices are gone, and so are stores that are small with low costs. The difference being that, yes, beans are cheaper in price by the ounce at a large store, but often can only be purchased in quantities that make the final cost high. The smaller-sized quantities typically sold at dollar stores are more expensive per ounce, but more affordable for low-income people and families. When stretching a limited household budget, $1 for a 10-ounce can of beans is less costly than $2 for 24 ounces — even though the latter is less expensive per ounce.
But what about the nutrition part of the argument? Because dollar-type stores typically sell packaged (code word for unhealthy) foods, the idea is to eliminate them so people will then travel to buy fresh (code word for not packaged) foods. But it turns out that simply isn’t the case. A recent study published in the Quarterly Journal of Economics showed that when large fresh-food grocers entered markets previously occupied only by dollar stores, only 10 percent of purchasers changed their eating habits. Over 90 percent kept right on buying and eating packaged foods.
It appears that size doesn’t matter when considering food purchases. Price matters. And a free market rewards the lowest cost operators, whether they are Walmart or Dollar General, with more customers. And it also rewards the customers with what they want to buy at the lowest cost. Meanwhile, like millions of you, I live in a middle-class suburb without a Walmart or a dollar store within a mile. Time to get on my bactrian and cross that food desert.
• Kevin Cochrane teaches business and economics at Colorado Mesa University, and is a visiting professor of economics at The University of International Relations in Beijing.
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