Food environment and childhood obesity: The effect of dollar stores

In this paper we examine the effect of dollar stores on children's Body Mass Index (BMI). We use data from a dataset compiled by the Arkansas Center for Health Improvement which created and implemented the BMI screening process for all public school children in the state of Arkansas. We combine propensity score matching with difference-in-difference methods to deal with time-invariant as well time-varying unobserved factors. We find no evidence that the presence of dollar stores within a reasonably close proximity to the child's residence can increase BMI. In fact, we see an increase in BMI when dollar stores leave a child's neighborhood which we interpret as a sign of neighborhood deterioration. Given the proliferation of dollar stores in rural and low-income urban areas, the question of how dollar stores could contribute to dietary health should be considered in efforts to combat childhood obesity.