Store Choice and Consumer Behavior in Food Deserts: An Empirical Application of the Distance Metric Method

Shopping and store-choice decisions are intertwined with firms’ decisions to enter or exit a market, as well as with heterogeneous consumer demographics. The importance of food access becomes apparent in determining where households choose to purchase food, as consumers residing in underserved areas are faced with shopping at non-traditional stores that may result in negative welfare outcomes. Research regarding consumer purchasing behavior has traditionally looked at store choice as a nested discrete choice decision; however, we propose an alternative approach that models consumer store choice preferences for store attribute bundles, including product assortment, store services, and price via the Distance Metric (DM) method of Pinkse, Slade, and Brett (2002). Methodologically, the use of the DM method offers a straightforward way to measure substitution patterns between stores with similar attributes. In addition, the importance of product assortment, store services, and price can be described to create a more flexible model of store selection within different markets across the U.S.

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 Record created 2017-04-01, last modified 2020-10-28

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