Effects of New Grocery Store Development on Inner-City Neighborhood Residential Prices

Abstract

A difference-in-differences approach is used to measure the impact of new inner-city grocery store developments on residential housing values in Worcester, Massachusetts. Using geocoded housing sales from 1988–2011, we develop a hedonic model, exploiting temporal and spatial discontinuities, to identify the effect of 12 new grocery stores on neighborhood housing prices. Results suggest these new stores were associated with an increase in sale prices of nearby homes, and these results could help inform current policies related to urban food deserts, in that new grocery stores have the potential to improve neighborhood wealth as well as health.