Does the purchase of local food contribute to local economy development? A systematic review

Food relocalization is an ongoing and increasingly popular trend in wealthier countries. Besides many reported positive effects, such as improved health outcomes, increased social coherence, etc., it is often argued by local food activists that buying more local food directly can foster rural development through multiplier effects. In order to facilitate evidence-based policymaking, this argument was evaluated through a systematic review. Seven major databases (ScienceDirect, Wiley Online Library, and Taylor and Francis Online, SpringerLink, AgECON, Sage and Emerald) were systematically searched, together with complementary searches performed in Google Scholar. The rigorous process of identification, screening, selection, and inclusion resulted in the identification of 25 peer-reviewed studies published between 2000 and 2019 for further analysis. The low number of studies permitted a qualitative assessment leading to a number of related statements. Data about four types of multipliers (output, employment, income, and value-added multipliers) were extracted. Twenty-four papers found that an increase in demand for local food had a direct positive impact on local economies in some ways. On the other hand, six papers found no effect in the case of other types of multiplier effects. One paper found no impact at all. The papers were classified into three groups based on their focal areas: marketing channel-focused, farm enterprise-focused, and scenario/impact analysis-focused studies. Most studies focus on farmers' markets, while knowledge about other specific channels is sparse. The second group of studies in terms of the object of study involve farm enterprises. Within this group, the number of studies with large, representative samples is currently small. In terms of the methods of analysis, three major approaches were identified: input-output models, assessments of descriptive statistics, and econometric analyses. Considerations related to the potential overestimation of current approaches were also presented. Although input-output models, especially the use of IMPLAN, were the most popular method of analysis, many studies (12/25) were based on other approaches. Output and employment multipliers were most often identified, but the existence of income multipliers was also frequently detected. The occurrence of value-added multipliers seems to be especially context dependent; thus, it is highly questionable whether impacts that are detected that relate to the level of sales or labor translate into an increase in the value added of the local economy. One implication for policymaking is that local food systems may be more appropriately considered as a means of increasing social cohesion than a motor of rural development. Although there is a diversity of applicable methods, the potential for reverse causality regarding whether local food systems are the consequences or drivers of local economic development should be addressed in the future.