Counter-cyclical demand watch #1
So we’re in a recession, and in a recession people tend to buy less of most everything. That is unless you’re dealing with inferior goods. So what’s been shown to be economic inferior goods lately?
Pasta. From a post to Curious Capitalist you can learn about the Pasta Index and the currently fabulous fortunes of the American Italian Pasta company. Decent pasta is reasonably healthy and costs much less than the food stuffs it’s replacing. From a Reuters article American Italian has done nicely the last bit:
Retail revenue for the quarter rose 56 percent to $136.1 million, primarily helped by higher average selling prices, the producer and marketer of dry pasta in North America said.
Library Books. This one isn’t surprising. As people become cash constrained they buy less and borrow more. Library lending is up all over the US as unemployment increases. A regional library network near Denver reports:
…a 25.3 percent increase in cardholders in 2008.
Love. From Marginal Revolution comes a post about how love is counter cyclical. (I’m a bit loathe to suggest “inferior” given the negative connotation.) The NY Times reports:
Match.com … had its strongest fourth quarter in the last seven years, and … Amy Laurent International, a matchmaking service with outposts in New York, Los Angeles and Miami, say business is up 40 percent among women over the last four months.
Church Attendance: More people are showing up at churches around North America. This is not necessarily good for the offering plate since people are on average giving less. From local paper in Santa Clarita:
“But volunteerism and mass attendance are certainly on the rise,” said Parish Business Manager Renee Fields. “With an increase in numbers, you would expect an increase in funds or if anything to stay stagnant but to start seeing a decline (in funds) we know that it is the economy.”
Now all of this makes sense since when under stress, especially about the future, people tend to concentrate on fairly basic things, like comfort and money (as a provider of food, shelter, safety).
Taking this a step futher, intangible things, like the environment, tend to get ignored since they provide only intangible benefits to individuals and families. So over the next while, see policy makers decide to talk about environmental issues but not provide a lot of money for them, and see donations to environmental causes drop over the next while.
Anything here rankle you? Feeling overly perturbed or elated? Leave a comment below. or subscribe to the Sauce Captain feed.
Comments
No comments yet.
Sorry, the comment form is closed at this time.