Supply-Side Subsidies to Improve Food Access and Dietary Outcomes : Evidence from the New Markets Tax Credit

In an effort to improve diet and health outcomes, policymakers have increasingly turned to supply-side subsidies aimed at encouraging investment by supermarkets and other food retailers in low-income areas. This paper examines whether the U.S. federal government’s New Markets Tax Credit (NMTC) has affected the entry of retail food establishments, and in turn food shopping and purchasing patterns, in low-income communities. To identify the impacts of the program, we take advantage of a discontinuity in NMTC funding generated by the formula used to determine the eligibility of census tracts for investment under the program. We find that the NMTC Program has had modest, but positive impacts on supermarket entry in low-income communities. Based on household-level scanner data, there are no detectable effects on households’ food purchasing patterns in affected neighborhoods, at least in the short run