What is the value of free food?

What is the value of free food?

Amit Batabyal, Arthur J. Gosnell professor of economics in the Rochester Institute of Technology

Food pantries clearly provide a valuable service to the general food assistance landscape in the United States. These pantries source food from food banks that are themselves frequently a part of the “Feeding America” network. The goal here is to provide food assistance and thereby attenuate the twin phenomena of food insecurity and hunger. In this regard, food insecurity can be thought of as a scenario in which there is insufficient access to adequate food that will enable one to lead an active and healthy life. The related notion of hunger is a physiological state that results from having insufficient food.

In the past, researchers have used a variety of techniques to analyze the value of food. However, these techniques cannot be used to gauge the value of food distributed by pantries either to a household or to an individual. This is because monetary transaction data do not exist for food pantries because they give away food for free.

Compounding the above difficulty, experimental techniques that are often very useful in other contexts also cannot be used to determine the value of food given away for free by pantries. This is because such techniques involve asking clients who use pantries invasive questions about how much they would be willing to pay for free food that might simply confuse them. In addition, the clients at such pantries are frequently cash strapped and therefore may well misrepresent the value they actually place on the food they are receiving if they are asked to think only in terms of dollars spent from one’s income.

Given these measurement difficulties, it might seem as though determining the value of free food is a fool’s errand. However, interesting new work by Anne Byrne and David Just shows that this is, happily, not the case. These two researchers use what economists call “revealed preference modeling” to generally ascertain the welfare effects of food pantries.

The focus of this research is on answering three specific questions. First, how much value does a food pantry bring to its users on either an annual or a per trip basis? Second, how much value would users gain by attenuating the travel costs related to reaching the nearest food pantry? Finally, how much value is associated with the full universe of clients that have access to a pantry system?

The empirical results obtained by Byrne and Just, using data for a food bank network in Larimer County, Colorado, are thought-provoking. First, they found that the annual value of access to the pantries studied was between $600 and $1000 for households that use these services. In addition, the value of a visit to a pantry, per visit, is approximately $40 to $60. Interestingly, a $5 reduction in the cost of roundtrip travel to a food pantry leads to the creation of annual value of about $40 to $55 for a client household. For readers interested in aggregate values, the annual value of having the food pantry network is between 13 and 18 million dollars. In this regard, it is important to understand that the pantry network under study served almost ten percent of the population of Larimer County.

It may seem as though the value of food that is distributed for free is, well, zero. Byrne and Just have provided a valuable service by showing us that just because the price of pantry provided food is zero, this does not mean that its value to those who consume this food is also zero. In fact, this value is clearly positive.

Amitrajeet Batabyal is the Arthur J. Gosnell professor of economics and the Interim Head of the Sustainability Department, both at RIT, but these views are his own.