Thursday, December 11, 2008

Shoe repair

I have used shoe repair as an example of an inferior good, a good that people purchase less as their incomes rise. Now a recent Associated Press article, with a dateline of Highland Indiana, re-enforces my contention that shoe repair is a good example of an inferior good.
Previous economic downturns have also brought about an increase in business, he said. There was a period when Jimmy Carter was president that the store had appointments for shoes backed up for at least two weeks, Forster said.
The report ends with this observation:
The economy may not be the only reason cobblers are seeing an increase in business.

Thomas Buck of Buck's Shoes in Valparaiso speculates that it's partly because many cobblers are older and retiring and aren't being replaced, resulting in less competition.

"It's something that's dying out," he said.
Why are they not being replaced? Because if shoe repair is an inferior good, it will decline as incomes rise, and incomes have risen during the past 60 years.

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