Food Expensiveness in Scotland's Remote Areas: An Analysis of Household Food Purchases ☆

The purpose of this paper is to investigate whether consumers in Scotland’s remote areas suffer from food prices that are higher than the average national prices (i.e., whether a ‘remoteness premium’ exists). The question has been raised by several organisations in those communities looking at the high prices in local stores. This paper provides a new perspective using actual purchasing prices of a sample of 5,252 households in Scotland for 2017 and 2018. In this way, households’ ability to shop for lower prices is considered, unlike previous studies. The Aguiar and Hurst (2007) expensiveness index (AHEI) was computed to measure of expensiveness of food at household level and controlling for differences in quality. It showed that consumers in remote areas pay a small premium (0.3 to 0.4 per cent) with respect to average prices, which is statistically significant but economically not relevant. To understand the effect of several factors, AHEI was regressed on a number of explanatory variables including local area characteristics and household demographics and consumers’ shopping strategy. The results were used to simulate three hypothetical scenarios related to impact of changes in population’s age, access to discount stores and social deprivation on food expensiveness.