The Effect Of Supply And Demand On The Accessibility Of Supermarkets In The United States Essay Examples
Type of paper: Essay
Topic: Food, Supermarket, Supply, Demand, Model, Health, Accessibility, Independent
In the United States, accessing healthy and sustainable food products has been a detrimental issue that is affecting the agenda and objective to develop sustainable and equitable food system. The limited access to the supermarket and other food stores is one of the contributing factors to the consumption of unhealthy food that has resulted in increased prevalence of related diseases and poor nutrition (Herrera, 2011). The accessibility of healthy and nutritious food from the supermarket has been placed with high-sugar, high-fat, and processed foods in convenience and fast food stores. For instance, according to the study conducted in 2009, a population of 23.5 million people could not access the supermarkets within a range of one mile away from home (Michimi & Wimberly 2010). Therefore, in order to curb this problem, it is significant to determine whether supply and demand among other factors have a correlation with limited access to the supermarkets across different regions. Therefore, the report hypothesis suggested that there is a close relationship between accessibility of supermarket and demand and supply factors.
Demand factors of Food Access
Supply factors and food retailer behavior
The supermarket supply or the availability of the supermarkets is determined by the cost of establishing and operating. In this case cost of inputs such as materials, land, machineries, human resources, and cost of products determines the supply of the supermarkets. The study found out that the difference in variable and fixed costs have a major impact on the availability of the supermarkets in various regions (Michimi & Wimberly 2010). The supermarkets that anticipate higher fixed costs engages into two options; they can constrain the range of commodity sold or charge higher prices. For instance, the fixed costs associated with land in urban areas is about 150 percent higher than in the rural areas. However, the high fixed costs in the urban areas are diluted by the higher volume of consumer in the urban centers compared to rural areas. Therefore, this was found to be the reason rural areas, where there is low population, have limited access to the supermarkets. In addition, some food such as perishable food, could not be stocked in such areas that have low volume of customers (Herrera, 2011). In addition, this helped to explain why people in the rural areas have travels a longer distance to access the supermarket. This is because the choice of poor to live in areas where there is availability of supermarkets is constrained by their financial positions.
Broad trend of supermarket
The chart above indicates how the trend of supermarket is declining in the USA while the fast food and convenience stores are increasing.
Hence, E= α+β1X1+β2X2+ε
E is the accessibility to the supermarkets
X1 is the demand factors measured by volume of customers (10000)
X2 is the supply factors measures by individual/household income ($10000)
ε is the error terms
Regression analysis using STATA
INTERPRETATION OF THE RESULT
The model in the analysis was regressed at 95 percent confidence level. The independent variables x1 and x2 were regressed against the independent variable E. this regression model utilized the coefficient parameters or the least square estimators of the study. The null-hypothesis of the study showed that the slope coefficient of x1 and x2 is zero such that HA;β1=0. On the other hand the alternative hypothesis of the slope of these coefficients is not zero, that is, (HA;β1≠0).
The t-statistics and the p-values in the regression analysis were used to decide where the variables, independent and dependent variables were statistically significant to the model at 95 percent. The R2 was used to measure the coefficient of determination, which should be more than 0.3 (R2 > 0.3). In the analysis model, the R2 was greater than 0.3 because it was 0.7265. Implying that the model was fairly and statistically acceptable. As a result, the variables of interest, x1 and x2 accounts for 72.65 percent due to the changes associated with dependent variables. Therefore, there is a significant correlation between the dependent variable, accessibility of supermarket, and independent variable, supply and demand factors.
At 5 percent significance level, x1 has P>|t| = 0.0000 and t-value of 4.85. This indicates that there are 0 percent probability that the obtained results come from random distribution, and therefore, the null hypothesis is rejected. This is because it is evident that there is 100 percent probability that the independent variable x1 has effect on dependent variable E. the β2 coefficient is 0.385025. This indicates that holding other factors constant, a unit increase in x1 or demand factors increases the E, number of supermarkets by 0.385025
On the other hand, variable X2 has a t-value = 5.70 and P>|t|= 0.000. Therefore, this implies that variable X2 is statistically significant to the model at 95 percent confidence interval. The X2 coefficient β2 is 0.3480569, implying that this variable will positively affect dependent variable Y by 0.3781043 holding other variables and factors constant.
The constant coefficient β0 is -0.5275899. This proves the significance of the model. The mean value of independent E is -0.5275899 implying that, when assuming that other variables are zero the value of dependent variable is -0.5275899
Therefore, the specific model can be written as follows;
E= -0.5275899+0.385025X1+0.3480569X2 +ε
The study confirms the hypothesis suggesting that there is a close relationship between accessibility of the supermarkets and the demand factors and supply factors. It is evident that, in order to increase the accessibility of the supermarkets, the demand factors, and supply factors must be increased accordingly. For instance, people can be able to access healthy and nutritious foods when their income is increased. In addition, consumers can be increased through various strategies in order to attract new investors in the supermarket industry. For instance, customers can be increased through activities as increasing awareness of the benefits associated with healthy and nutritious food is also important (Michimi & Wimberly 2010). In this way, public health campaigns are appropriate and effective in both rural and urban areas. Reducing the high costs incurred by the supermarket can be an effective strategy to reduce the price of the commodities and hence encourage people to consume healthy foods (Herrera, 2011). Therefore, increasing the accessibility of the supermarket and hence healthy foods, the policy makers should concentrate on both the demand side and the supply side.
Herrera, N. M. (2011). Access to affordable and nutritious food: measuring and understanding food deserts and their consequences. Eating right: the consumption of fruits and vegetables, 1-137.
Michimi, A., & Wimberly, M. C. (2010). Associations of supermarket accessibility with obesity and fruit and vegetable consumption in the conterminous United States. International Journal of Health Geographics, 9(49), 1-14. doi:10.1186/1476-072X-9-49