Wal-Mart Facts

by Don Boudreaux on April 25, 2008

in Current Affairs, Myths and Fallacies, Regulation, Wal-Mart

A few days ago I sent this letter to the New Republic:

Jordan Stancil alleges that “rural Americans have seen their ownership of their communities hollowed out by relentless consolidation in the retail and financial sectors” (“It’s the Wal-Marts, Stupid,” April 18).  He laments that he and his fellow thirtysomethings from rural America are “the first generation of non-owners.”  To support these claims, however, he offers only personal anecdotes and impressions.

Fortunately, economists Andrea Dean and Russell Sobel have investigated this oft-told tale using data.  Their findings cast serious doubt on the veracity of Mr. Stancil’s allegations.  For example, Dean and Sobel find that the five U.S. states with the greatest number of Wal-Mart stores per-capita have a self-employment rate identical to the self-employment rate in the five states with the fewest Wal-Mart stores per-capita.  And in those states enjoying a high density of Wal-Marts, the number of businesses with nine or fewer employees is higher per-capita than in those states with a low-density of Wal-Marts.  Dean and Sobel conclude that “Wal-Mart has had no significant impact on the overall size and growth of U.S. small business activity.”

Donald J. Boudreaux

You can find the Dean-Sobel paper here; it’s entitled “Has Wal-Mart Buried Mom-and-Pop?”


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