Does Wal-Mart Sell Inferior Goods?

16 Pages Posted: 28 Apr 2008 Last revised: 24 Nov 2016

Emek Basker

U.S. Census Bureau - Center for Economic Studies; University of Missouri - Department of Economics

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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 Classification: L81, D12

Suggested Citation

Basker, Emek, Does Wal-Mart Sell Inferior Goods?. Economic Inquiry, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1125704 or http://dx.doi.org/10.2139/ssrn.1125704

Emek Basker (Contact Author)

U.S. Census Bureau - Center for Economic Studies ( email )

4600 Silver Hill Road
Washington, DC 20233-9100
United States

University of Missouri - Department of Economics ( email )

118 Professional Building
Columbia, MO 65211
United States

HOME PAGE: http://emekbasker.org

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