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. (JEL L81, D12)
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