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Does Wal-Mart Sell Inferior Goods?

Emek Basker
University of Missouri - Department of Economics

Economic Inquiry, Forthcoming

Abstract:
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.

Keywords: Retail, Wal-Mart, Target, Inferior Goods

JEL Classifications: L81, D12

Working Paper Series

Date posted: April 28, 2008 ; Last revised: August 25, 2008

Suggested Citation

Basker, Emek, Does Wal-Mart Sell Inferior Goods?. Economic Inquiry, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1125704

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Contact Information

Emek Basker (Contact Author)

University of Missouri - Department of Economics ( email )

118 Professional Building
Columbia, MO 65211
United States
573-882-6023 (Phone)
573-882-2697 (Fax)

HOME PAGE: http://web.missouri.edu/~baskere/