The Economics of Eating Local

One of the biggest arguments people make in favor of eating local is that it helps the local economy. But does it?

A 2008 study by the Ochs Center in Chattanooga says that if consumers in Chattanooga's 100-mile foodshed were to purchase just 5 percent more of their beef, eggs, dairy, and fresh fruits and vegetables from local sources, "it could mean as much as $30 million increased spending in the regional economy."

As the food production and consumption statistics are similar for the Chattanooga and Knoxville local foodsheds, could a concerted effort to buy local produce to have a big impact on the local economy?

Probably not, says Matt Murray, a professor of economics at the University of Tennessee.

"It would be really hard to argue that this ‘buy local food' movement has an economic impact. It's really more of a quality issue, or a diversity issue."

Murray points out that while buying produce from local farmers does ensure 100 percent of your purchase price goes to someone local, spending less money on produce at a supermarket gives you more money to spend on other things in the local economy.

"If I spend $5 more on heirloom tomatoes at the farmers' market, that's $5 less that I can spend elsewhere," Murray says. "It's hard to see how that produces a significant net in the local economy."