An interesting article from The Associated Press on a study released today from the University of Nebraska-Lincoln:
LINCOLN, Neb. — Counties with a Wal-Mart store experience slower growth in their standard of living than those without the world's largest retailer, according to a preliminary study released Tuesday.The University of Nebraska-Lincoln study compared growth in household income from 1979 to 2002 in 19 Nebraska counties with Wal-Marts to 74 without, after controlling for other economic variables that determine household income.
Critics of the retailer say Wal-Mart often comes into small towns and drives main street stores out of business. Company supporters counter that Wal-Mart provides millions of jobs and helps keep product prices low.
Azzeddine Azzam, the UNL agricultural economist who led the study, cautioned against drawing overly simplistic conclusions about Wal-Mart.
"There is a Wal-Mart effect, but we don't completely understand it," Azzam said. "Wal-Mart didn't create the economic conditions that have led to its success, but it has learned to take advantage of them."
Wal-Mart spokeswoman Sarah Clark did not immediately respond to a request for comment.
Azzam said several studies in recent years have looked at Wal-Mart's impact on local economies, but with mixed findings.
Azzam said his study also sought to account for the effects other economic variables would have on household income.
"Most of the studies attribute all changes in sales, tax revenues or other measures of economic activity to the presence of Wal-Mart, which could potentially bias conclusions in favor of or against the store," Azzam said.
After accounting for the other variables, the UNL study found that the average annual growth in median household income, adjusted for inflation, in the 19 counties with a Wal-Mart was $142.62 below the average annual growth in the 74 counties without a Wal-Mart.
More below the fold.
The study found that the impact of a Wal-Mart depended on factors such as whether counties are urban or rural; how dependent their economies are on agriculture; and whether they are located along Interstate 80, the state's main east-west highway.The counties whose standards of living seem to benefit most from Wal-Mart, according to the study, are those along I-80 that do not have a store themselves, but are adjacent to counties that do.
On the other hand, the counties that seemed to see the biggest negative impact in their standard of living are urban counties that have Wal-Marts. The study defined urban counties as those with at least 2,500 people living in a city.
For example, urban counties along I-80 in which Wal-Marts have opened since 1985 have seen annual drops in inflation-adjusted household income of $89, compared to $143 for those not along the interstate.
The declines were $65 and $118 for urban counties in which Wal-Marts opened since 1995.
"This isn't necessarily cause and effect," Azzam said. "Wal-Mart is a manifestation of the restructuring going on in the U.S. economy ... It's a symptom of the economy, not necessarily a cause."
Azzam said he's compiling statistics about Wal-Mart's effect on employment and wages, which will be the subject of another study.
Posted by Jeremy - September 19, 2006 06:49 PM - In The News