Business » Localism

Does Buying Local Really Matter?


On a sunny spring Saturday, Eighth Street in downtown Boise is a crush of bodies. Thousands throng the pedestrian-friendly thoroughfare sampling local breads, local wines, local popcorn and local meats. They buy local produce and chat with local artisans. Local musicians perform along the sidewalks and local art is sold in the round at the Grove Plaza. It's an all-out orgy of localism at the Capital City Public Market, but does it actually help the local economy?

Chris Blanchard thinks so. An adjunct history professor and urban scholar at Boise State, he said movements that encourage local economic independence don't only improve local economies, they're a matter of survival--especially for isolated metros like Boise.

"In the age of global market capital, on-the-ground economic development is flowing to the largest cities," he said. "That leaves small- and medium-sized cities saying, 'What about us?'"

That question is being asked by communities around the country and has resulted in the growth of "buy local" campaigns from coast to coast. But despite increased interest, Blanchard said the economic case for localism hasn't been made adequately; that's because most research on the topic has focused on high-level trends and the social and political forces that drive it, not the bottom-line, dollars-and-cents impact.

Lacking hard economic data, most localism boosters have had to rely on anecdotal evidence of job creation and speak in terms of community spirit and environmental consciousness.

It's difficult to put a financial value on intangibles like community-mindedness, so "traditional economists have kind of walked away from these things," Blanchard said.

Some academics, he added, have even dismissed "buy local" campaigns as akin to protectionism and throwbacks to out dated economic models.

"In old, old, old economic theory--the 1500s--the prevailing theory was mercantilism, which sought to hoard all of your wealth within your country," Blanchard said. "That was a problem because obviously you couldn't conduct trade with other countries. We know now how important that is. What economists would say [about localism] is we've seen this before in the 1500s. It's called mercantilism."

Don Holley, who chairs the economics department at Boise State, definitely falls in the camp of "traditional economists" who are unimpressed by "buy local" campaigns.

"It does promote local employment, and it does promote a sense of community, but at the same time, it promotes economic inefficiencies--in other words, you're probably replacing a low-cost producer from outside the community with a higher-cost provider inside the state," he said.

"It makes good politics, but in the marketplace, it doesn't sell very well," Holley added. "The marketplace is not a friendly place. It's not a place where you build community."

Janie Burns would disagree. Co-owner of Meadowlark Farms--where she raises 1,000 chickens and 55 ewes south of Nampa--and Home Grown Poultry--with its 20,000 chickens in New Plymouth--Burns has done business primarily with public markets for 21 years.

"There's money in feeding ourselves rather than buying from outside the state," Burns said. "You're creating jobs, you have food in the community, you have food security ... In a world of resources that are limited, this is a way we can parlay what we have into the greatest benefit."

A committed localist, Burns said it makes intuitive sense to keep dollars where they live; but getting the idea to catch on with lawmakers and the broad mass of American consumers has been challenging.

Like Blanchard, she said that's because despite its apparent benefits, the raw economic data measuring the localism's economic impact hasn't been adequately compiled in Idaho.

Burns is a member of the Treasure Valley Food Coalition, an organization that operates in tandem with Think Boise First, under the umbrella of Sustainable Community Connections of Idaho. Burns, along with local restaurateur Dave Krick, is working on a project to map and measure the area's local food system with an eye toward proving its potential as an economic powerhouse.

"We all have kind of a sense that things are screwed up," Burns said. "We hope this will give us some ammunition to impact policy."

Krick, who owns Bittercreek Ale House and the Red Feather Lounge on Eighth Street, said the economic impact of local food is huge, but without a suite of cold, hard facts, it will continue to be ill-understood.

"If you look at just the Treasure Valley, we're probably purchasing more than $1 billion of food from outside our state," he said. "We could potentially keep billions of dollars here by focusing on markets for food in our own state and by keeping it local ... The case hasn't been made in terms of the economic impact in real numbers, and it's an example of where that economic data would really help us."

The research that has been done on localism's economic impact has focused on more populous regions like the East Coast, California's Bay Area and Chicago. One study in particular--"The Economic Impact of Locally Owned Businesses vs. Chains: A Case Study in Midcoast Maine"--is frequently quoted by "buy local" campaigns around the country.

Conducted in 2003 by the Institute for Local Self-Reliance, the Midcoast report suggested that for every $100 spent with local businesses, about $45 stays local. Compare that with $100 spent at a big box store or out-of-state-based franchise, and the study claimed only $14 stays local while the rest is shipped off to the corporate home office.

The chief economic benefit, according to the report, was that local businesses tend to shop local.

"Dollars spent at a local retailer support not only that store, but a variety of other local businesses, including local banks, accountants, printers and Internet service providers," the study concluded. "From an economic development perspective, the ramifications of this are substantial."

But, like the old mercantilist model, Holley said the financial boon promised by localism only pans out if the system is wholly local.

"The greater the number of local connections, the greater the impact it's going to have," he said. "You need to find those inter-industry connections, and it's hard to find an industry in Idaho that's dependent on Idaho inputs ... The Idaho dairy industry is an example of how that can work, but even there, there's a lot that they have to buy outside the state."

Holley contends that the primary goal of building a sustainable local economy is to allow the market to function in such a way that it keeps prices low, thus decreasing residents' cost of living.

"When you get into retail and you get into the big box stores... the research out of MIT just a few years ago showed that these kinds of stores have done more to reduce the cost of living for the people who shop there than anything else," he said. "Foreign competition has kept prices low."

But localism boosters like Burns and Krick contend there are more important goals than "low, low prices."

"I'm not as attached to the idea of shopping local because it makes you feel good," Krick said. "The intangibles to me are our unique sense of place. What defines us as a place.

"Take Roquefort, Burgundy, Dijon for example," he added. "These places have built legend and lore around what they produce because they have built a culture around it, and as the Treasure Valley moves forward, it would be important to form culture here. It creates reasons for people to come here and get to know us. It creates products that have added value."

Burns said the question comes down to how we define "economic efficiencies."

"Is price and having the cheapest thing possible the goal of our society? If you're looking at: 'Are people well fed? Are they getting the most nutrition from what they're eating?' We don't measure those efficiencies. We don't even value them," she said. "They're looking at the greatest return for the dollar spent or time spent, but there's so much more to food than that--there's health, community, jobs. It's about looking at things in a little bit different way."