Does Wal-Mart Sell Inferior Goods?
University of Missouri - Department of Economics; U.S. Census Bureau - Center for Economic Studies
Economic Inquiry, Forthcoming
I estimate the aggregate income elasticity of Wal-Mart's and Target's revenues using quarterly data for 1997-2006. I find that Wal-Mart's revenues increase during bad times, whereas Target's revenues decrease, consistent with Wal-Mart selling "inferior goods" in the technical sense of the term. An upper bound on the aggregate income elasticity of demand for Wal-Mart's wares is -0.5.
Number of Pages in PDF File: 16
Keywords: Retail, Wal-Mart, Target, Inferior Goods
JEL Classification: L81, D12
Date posted: April 28, 2008 ; Last revised: August 25, 2008
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