The Health Behind Higher Prices : An Analysis of Produce Pricing Dynamics in Kalamazoo

Abstract

In recent years, consumers' health consciousness has given way to increased demand for nutritious, high-quality food. This development has precipitated a renewed interest for locally grown food. However, while local food markets are shown to deliver high quality produce items, they aren't viewed as price competitive with similar produce items purchased at conventional superstore markets. This paper seeks to investigate the validity that produce prices are lower at superstores than at farmers' markets by using Kalamazoo as a case study. For the purpose of this study, price data for several produce items are collected over a period of eight months from vendors at the local farmers' market and the local Meijer stores in Kalamazoo. Using this data, a statistical analysis was performed to test whether the price difference for a specific item of produce purchased at the two markets was statistically significant. The findings of this study do not provide unequivocal support to a price advantage that favors the superstore in all cases. Even in cases where the price difference is statistically significant, other factors, such as quality and environmental externalities, obscure the observed price advantage. The study concludes with policy recommendations that would help level the playing field of the two markets. The results of this study indicate that it may make sense to advocate for policies that support locally grown food systems in an effort for society to recognize the energy savings, health benefits, and environmental benefits that stem from such a system. Finally, the discussion in the last chapter includes the tentative nature of this study and suggestions for future improvement on this type of research endeavor.