Premiums for Residing in Unfavorable Food Environments: Are People Rational?

The most extensive research areas in the food environment literature include identifying vulnerable dietary environments and studying how these environments affect eating behaviors and health. So far, research on people’s willingness to pay (WTP) for residing in different types of food environments is limited. Therefore, this study aims to estimate WTP for different types of food environments by using spatial hedonic pricing models. The empirical application applies to the Canadian city of Edmonton. The results show that people are willing to pay a premium to live in neighborhoods with poor access to supermarkets and grocery stores (food-desert type) and neighborhoods with excessive access to fast-food restaurants and convenience stores (food-swamp type). Why do rational people prefer to live in disadvantaged food environments? The seemingly counter-intuitive result has its rationality. The premium paid to live in food-desert type environment may reflect people’s dislike of noise, traffic jams, and potential safety issues brought by supermarkets and grocery stores. The WTP for living in food-swamp type environment may reflect people’s preference for convenience and time-saving brought by fast-food consumption in modern urban society. Additionally, the inability of low-income families to afford healthy food may be a deeper reason for choosing to live in neighborhoods with excess access to fast food. To improve the eating environment and encourage healthy lifestyles, the government can encourage healthier fast-food restaurants, provide grocery shopping vouchers, and promote community garden projects.