Could Transit Help Off-Set the “Ghetto Tax”?

The folks putting together the Towards a Just Metropolis Conference turned me on to Debabrata Talukdar’s “Cost of Being Poor: Retail Price and Consumer Price Search Differences across Inner-City and Suburban Neighborhoods.”  The study tests, and confirms, the hypothesis that poor, inner city residents pay more for everyday grocery items than those of middle and upper income.  This “ghetto tax” has also been shown to apply to auto insurance and, of course, “redlining” of home mortgages.

A little thinking may lead you to say, “Yeah, of course these folks pay more.  There are fewer stores in low income communities, and suburban areas have ready access to a number of large, cost-efficient supermarkets.” Say what you want about Wal-Mart, but I’m sure they run a leaner ship than your corner liquor store.

But what the study found was that it was not income alone that determined the difference, but rather income plus mobility:

I again find that while nonpoor and poor households with access to cars have no systematic difference, the poor households without access to cars do, and their likelihood of using the nearest supermarket [Ed. as opposed to the costly, inefficient corner store] is substantially lower after controlling for store distance…What critically affects a consumers price search behavior is not her residential area or the poverty level per se but whether or not she owns a car.

Now, let me say from the outset that this is NOT an argument for expanding car ownership, and Dr Talukdar doesn’t think so, either.  Nearly half (48%) of all the poor households in the study did not own a car, and it’s likely not because they didn’t want one. 

What he does call for, however, is “appropriate city planning of public transit infrastructure that ensures easy access between between poor inner-city neighborhoods and large, commercial shopping centers.”  Good thinking.

I think the author could also have added a number of other planning-related recommendations (permitting/encouraging local food production, easing mixed use development), but little could tip the scales faster than getting folks to where the lower prices are now on transit. 

As continued transit cuts further isolate poor Californians from job opportunities and vital social services, we now also know that the resultant decline in mobility raises household costs for even the most basic day-to-day necessities. 

So, to summarize, we know that transit creates more jobs, is safer than car travel, helps the environment, improves public health, reduces household transportation costs, reduces housing costs  and (thanks to Dr Talukdar) makes many other things cheaper, as well—especially for those who need to avoid high prices the most.