Incentive contract design for food retailers to reduce food deserts in the US

In the US, obesity affects over 37% of the adult and over 16% of the child and adolescent population. Although not-for-profit agencies cannot directly control what a person eats, they can influence the supply side of the obesity epidemic by incentivizing food retailers to open stores in regions of the US where healthy food options do not exist. CHOT researchers present an incentive contract design for food retailers to reduce food deserts in the US. These subsidies are designed to create financially viable conditions for food retailers to offer high quality, healthy food alternatives. The researchers developed optimization models to determine the most effective and equitable resource allocations. The impact of retailer location on obesity rate is based on estimates of marginal effect of incentives on obesity rate. Given an example initiative in metropolitan Atlanta, Georgia and surrounding counties, the overall countywide obesity rate would decrease by 1.17%. This incentive contract design strategy is a positive step toward ensuring that the underserved US population has better access to healthy foods while helping solve the obesity epidemic. To learn more about how to design an incentive program for your community please contact the authors.

Bastian, N. D., Swenson, E. R., Ma, L., Na, H. S., & Griffin, P. M. (2017). Incentive contract design for food retailers to reduce food deserts in the US. Socio-Economic Planning Sciences.

For more information, please contact: Nathanial Bastian, PhD at ndbastian@psu.edu

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