The Local Economic Impact of Wal-Mart By Michael J. Hicks

Finally, in Section V, I review the legal environment surrounding Wal-Mart and evaluate the political economy of the anti-Wal-Mart legislation. I conclude the study with research and policy recommendations to state and local leaders who are considering Wal-Mart’s entrance into a community.

In addition to critically examining over 200 relevant studies, I contribute completely new statistical analyses in each section. Thus, this book contains a dozen brand new empirical studies embedded within a critical review of the existing research. Many of my findings echo existing work by others (or my previous research), but a larger proportion of this research is being presented for the first time here. The methods are, however, not new, and the techniques of analysis are, in virtually every instance, familiar to economists.

Consistent with the objective of this book, I include substantial technical detail regarding the estimation of Wal-Mart’s impact. This technical component should be clear to academic researchers and graduate students who are familiar with scholarly research in econometrics or statistics. Readers who have a less technical background may react to the statistical details with less joy than my economist colleagues. To assist those who are less well versed in econometrics, each equation and graph is accompanied with a clear description of the link between Wal-Mart and the effect discussed. Most readers will find that the depiction of Wal-Mart’s effects presented in the fashion that I offer in this book more clearly illuminates, rather than masks, relationships between the retailer and the markets in which it acts.

In the end, this book tackles the most salient questions about Wal-Mart’s local impact—Where does Wal-Mart locate stores? What happens to the local retail economy? What stores close, and which new stores open? Will prices drop? What happens to tax collections when Wal-Mart comes to town? How much will Wal-Mart cost local taxpayers? Will Wal-Mart cause us to pay more for antipoverty programs? Will Wal-Mart close mom-and-pop stores? Will local charities suffer? What will happen to sprawl in our county?—in addition to many, many more. Before addressing these issues, however, I explore some important history of chain stores and big-box stores in the United States.