In 1998, a study of supermarkets in the Los Angeles area and Orange County area found that a gallon of milk could cost as much as $3.75, while many neighborhood stores in more affluent neighborhoods charged as little as $1.05 per gallon (Odabashian 1998).
The overall quality of the food sold in low-income areas continues to tend to be of inferior nutritional quality, compared with that of higher-income stores: the food is higher in sugar, and lower in protein and fiber (Lehrer 2010). Low-income areas are less apt to have safe open places to house farmer's markets. Low-income neighborhoods have been called by First Lady Michelle Obama 'food deserts' or places where it is virtually impossible to find healthy food at a reasonable cost. In terms of asymmetrical information as well, lower-income consumers may also not know as much about nutrition as higher-income consumers, and thus exert less demand pressure upon sellers to provide better options. Bodegas know that they can sell processed foods, without dealing with the additional costs and hassles of selling fresh produce, which can spoil.
Yet it has also been found that when low-income consumers have the opportunity to shop more healthfully, such as being able to use public assistance to shop at farmer's markets, they do so eagerly. New York's Health Bucks program, "offers $2 coupons to people in vulnerable areas for the purchase of fresh fruit and vegetables at participating farmers' markets, generating...
The consequences of high healthcare costs due to lifestyle-related illnesses will be high amongst the poor unless such food deserts are eradicated, and unless food assistance policy is changed so that so-called 'ingredients' like soda are allowed to be purchased with food stamps, but prepared foods like cooked, plain rotisserie chickens are banned from the program (Lehrer 2010).
References
Adverse selection definition, 2001, Investopedia. Retrieved October 17, 2010 at http://www.investopedia.com/terms/a/adverseselection.asp
Lehrer, Brian. (2007, September 24). Are you being gouged? WNYC.
Retrieved October 17, 2010 at http://beta.wnyc.org/shows/bl/2007/sep/24/are-you-being-gouged/
Lehrer, Brian. (2008, October 12). Food stamp of approval. WNYC.
Retrieved October 17, 2010 at http://beta.wnyc.org/shows/bl/2010/oct/12/food-stamp-approval/
Ploeg, Michele Ver. (2010, March 10). Access to affordable, nutritious food is limited in "food deserts" Amber Waves. Retrieved October 17, 2010 at http://www.ers.usda.gov/amberwaves/march10/features/FoodDeserts.htm
Odabashian, Elisa. (1998, July 21). The land of milk and money. Consumer Union. Retrieved October 17, 2010 at http://www.consumersunion.org/other/larptwc798.htm
