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DOES WAL‐MART SELL INFERIOR GOODS?
Author(s) -
BASKER EMEK
Publication year - 2011
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2009.00195.x
Subject(s) - revenue , economics , elasticity (physics) , price elasticity of demand , microeconomics , income elasticity of demand , monetary economics , finance , materials science , composite material
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. ( JEL L81, D12)