Food Expensiveness In Remote Areas Of Scotland: A Natural Experiment Measuring The Out-Shopping Effect

An important aspect of the survival of remote rural areas is whether the food prices are higher to those paid elsewhere. Literature about this “remoteness premium” is inconclusive . This paper investigates the effect of out-shopping on food expensiveness in remote areas in Scotland and assesses if it can explain differences in estimates from various studies. For this purpose, a natural experiment was used. An expensiveness index was constructed using home scanner data. Food expensiveness was compared during the 2020 COVID-19 lockdown, when travel restriction prevented out-shopping, with the data from the same period in 2019. It was assumed that the difference – after controlling for the change in the purchased bundle of goods – may be attributed to the lockdown effect, preventing out-shopping. The results find that the premium paid in remote rural areas was small and out-shopping is an important factor limiting food expensiveness in remote areas of Scotland.