Food prices in Scottish remote rural areas: Measuring and explaining the ‘remoteness premium’

The paper investigates whether consumers in Scotland’s remote areas suffer of food prices higher than the country’s average prices (i.e., a ‘remoteness premium’). The question is of particular importance given the concerns about the sustainability of those communities. The Aguiar and Hurst (2007) expenditure index (AHEI) was computed as a measure of food expenditure using a sample of 2,636 households from Kantar Worldpanel database for Scotland for 2018. It showed that consumers in remote areas pay a small (0.2 per cent) but statistically significant premium. The differences amongst households were explained by demographic variables and shopping habits using a weighted least square regression. On average, consumers in remote areas are older and shop less actively (shopping in concentrated in fewer stores, with a lower number of trips) than others consumers in Scotland. The results raise concerns as these factors are expected to become even more severe in the future.