Wal-Mart Isn't Evil

Read the column here (11 December 2011).

The column I had originally intended to pen for the Sunday after Thanksgiving had to do with things for which we should be thankful – not the things folks typically think of, but rather those parts of our political culture that we usually take for granted: peaceful transfer of power, real opposition parties, a free press, etc. I don’t think that we fully appreciate how rare those have been throughout history, and the fact that in many places in the world are still so today.

But then this Wal-Mart thing came up – and it doesn’t seem to be going away anytime soon. Maybe I will get back to the political version of being thankful at some point.

Be that as it may, this is another of those times when I ended up with far too much research material to condense down to a Sunday opinion column. Listed first are the sources that I cited in the column, followed by others that I used for background and context. Note that I did not even broach the subjects of the “sustainability,” “local foods,” “express,” and “green” policies that Wal-Mart has initiated in recent years.

And how many of you caught the homage to Reagan?

Cited in the column:

NATIONAL BUREAU OF ECONOMIC RESEARCH "Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart"

NBER Working Paper (December 2005)
http://papers.nber.org/papers/w11809
Abstract – Consumers often benefit from increased competition in differentiated product settings. In this paper we consider consumer benefits from increased competition in a differentiated product setting: the spread of non-traditional retail outlets. In this paper we estimate consumer benefits from supercenter entry and expansion into markets for food. We estimate a discrete choice model for household shopping choice of supercenters and traditional outlets for food. We have panel data for households so we can follow their shopping patterns over time and allow for a fixed effect in their shopping behavior. We find the benefits to be substantial, both in terms of food expenditure and in terms of overall consumer expenditure. Low income households benefit the most.

Journal of Applied Econometrics (December 2007
http://onlinelibrary.wiley.com/doi/10.1002/jae.994/abstract
Abstract – Non-traditional retail outlets, including supercenters, warehouse club stores, and mass merchandisers, have nearly doubled their share of consumer food-at-home expenditures in the U.S. from 1998 to 2003. Wal-Mart supercenters have had the biggest impact on food retailing as they compete most closely with traditional supermarkets and offer many identical food items at an average price about 15%–25% lower than traditional supermarkets. We consider consumer benefits from this market share growth and estimate the effect on consumer welfare of entry and expansion into new geographic markets. We calculate the compensating variation that arises from both the direct variety effect of the entry of supercenters and the indirect price effect that arises from the increased competition that supercenters create and find the average effect of the total compensating variation to be 25% of food expenditures. Since we find that lower income households tend to shop more at these lower priced outlets, a significant decrease in consumer surplus arises from restricting entry and expansion of supercenters into new geographic markets.

Journal of Applied Econometrics Data Archive (December 2007)
http://qed.econ.queensu.ca/jae/2007-v22.7/hausman-leibtag/

FEDERAL RESERVE BANK OF MINNEAPOLIS (fedgazette)

"The Wal-Mart Effect: Poison or Antidote for Local Communities"
http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3033

"The Research Literature on Wal-Mart: Some Frowns, Some Smiley Faces"
http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=1122

"Thomas J. Holmes on Wal-Mart’s Location Strategy"
http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=1382

"The Diffusion of Wal-Mart and the Economies of Density"
http://www.minneapolisfed.org/research/events/micro/diffusion_walmart_ju...

"Self-Styled Expert Travels the County to Prepare Towns for Wal-Mart Invasions"
http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3942

RICHARD VEDDER and WENDELL COX
"The Wal-Mart Revolution: How Big Box Stores Benefit Consumers, Workers, and the Economy"
http://archive.frontpagemag.com/readArticle.aspxARTID=25543
http://www.aei.org/book/economics/the-wal-mart-revolution-book/


COMPETITIVE ENTERPRISE INSTITUTE
"Wal-Mart and the Politics of American Retail"
http://cei.org/sites/default/files/Zachary%20Courser%20-%20Wal-Mart%20an...
Gives an overview of the history of American retail and department stores; says that the fear and loathing of Wal-Mart is just the latest is a long series of such directed toward companies that have revolutionized retail, such as Sears, Woolworth, and A&P.

Bckground and context:

ABC NEWS Wal-Mart Unveils Tiny Walmart Express in Arkansas"
http://abcnews.go.com/Business/wirestory?id=13753201

ABOUT.COM FOOD & BEVERAGE
"Wal-Mart Plans to Open its First Wal-Mart express Stores"
http://foodbeverage.about.com/od/Market_Updates/a/Wal-Mart-Plans-To-Open...

AMERICAN ENTERPRISE INSTITUTE
"The Wal-Mart Revolution"
http://www.aei.org/print/the-wal-mart-revolution-book

THE ATLANTIC

"The Wal-Mart Effect"
http://pqasb.pqarchiver.com/theatlantic/access/785979451.html?FMT=ABS&FM...

"How Walmart is Changing China"
http://www.theatlantic.com/magazine/print/2011/12/how-walmart-is-changin...

"The Great Grocery Smackdown"
http://www.theatlantic.com/magazine/print/2010/03/the-great-grocery-smac...

"An Insider’s Account of Walmart’s Local Foods Program"
http:/www.theatlantic.com/life/print/2010/11/an-insiders-account-of-walmarts-local-foods-program/66659/

BUSINESS WEEK
"Wal-Mart: Making Its Suppliers Go Green"
http://www.businessweek.com/magazine/content/09_21/b4132044814736.htm

CATO INSTITUTE "Is Wal-mart Good for America?"
http://www.cato.org/pub_display.php?pub_id=10989

CENTER FOR INDIVIDUAL FREEDOM
"Economist Explains Why Wal-Mart’s Business is Good for America"
http://www.cfif.org/htdocs/freedomline/current/in_our_opinion/wal-mart-i...

FORBES
"Wal-Mart is Good for You"
http://www.forbes.com/2008/01/09/walmart-retail-economy-biz-commerce-cx_...

"In Pictures: Ten Wal-Mart Myths"
http://www.forbes.com/2008/01/09/walmart-retail-economy-biz-commerce-cx_...

FOUNDATION FOR ECONOMIC EDUCATION "Wal-Mart is Good for the conomy"
http://www.fee.org/pdf/the-freeman/1005Semmens.pdf

HUFFINGTON POST
"Wal-Mart plans to Open 40 Scaled-Down Express Stores This ear"
http://www.huffingtonpost.com/2011/03/10/wal-mart-express-stores_n_83415...

INDEPENDENT RETAILER
"Walmart Express Stores"
http://independentretailer.com/2011/08/01/walmart-express-stores/

MOODY’S ANALYTICS "Good or Bad? Wal-Mart’s Effects on Consumers"
http://www.economy.com/home/login/cnf_proLogin.asp?status=1&script_name=...

NATIONAL PUBLIC RADIO
"Wal-Mart Pares Costs By Selling Local Produce"
http://www.npr.org/templates/story/story/php?storyId=93956012

NEW YORK TIMES

"Wal-Mart to Buy More Local Produce"
http://www.nytimes.com/2010/10/15/business/15walmart.html?adxnnl=1&adxnn...

"Wal-Mart to Seek Savings in Energy"
http://www.nytimes.com/2005/10/25/business/25walmart.htm

REUTERS
"Wal-Mart pushing Chinese Suppliers to go Green"
http://www.reuters.com/assets/print?aid=USN1324792520080314

THE STREET
"Looking at the Wal-Mart of the Future"
http://www.thestreet.com/print/story/11331416.html

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