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89 Monthly Lab. Rev. 1085 (1966)
Prices in Poor Neighborhoods

handle is hein.journals/month89 and id is 1109 raw text is: Prices in Poor Neighborhoods If he be tame and have ben rydden upon, then caveat emptor.' PHYLLS GRooM* RECENT ENDEAVORS to protect consumers against misrepresentation and lack of information have led to charges that the poor pay more for what they buy than those who are better off. As part of the investigation of this question, the Bureau of Labor Statistics was asked to find out whether merchants charged higher prices in low-income neighborhoods than in better-off areas.2 The full reports of three surveys it made will be published; this article presents some of the findings, along with work of the Bureau and others that bear on the question. In general: 1. For equivalent rents, poor families get poorer housing than families with higher incomes. 2. Food prices are associated with the kind of store rather than with the geographic area. In buying food, the poor pay more if they shop in the small independent stores rather than in the large independents and the chain stores, whose prices, are lower. In poor neighborhoods, small sizes are more popular than the relatively cheaper large sizes. 3. For clothes, appliances, and other items, the survey results are inconclusive. What is confirmed is that the poor do not buy the same items as the better off. These conclusions are based on data from a 1960-61 survey of housing units, the pricing in the. spring of 1966 of 18 food items in chain stores and large and small independent stores, and of 16 other items in department stores, appl.ance stores, clothing stores, and drug stores. In the six cities surveyeds the sample for food consisted of 15 stores in the low-income area and 15 in the higher income area. Eight stores in each area were sur- veyed for the other items. The low income and higher income areas were classified by 1960 social and economic census data, the most recent available. The stores surveyed for low-income buying were in the lowest quartile area of the city according to income, education, and rate of unemployment and, where possible, in areas representing the lowest part of that quartile. To represent higher income buying. stores were selected from stores regularly priced. for the Consumer Price Index in the rest of the city. As a yardstick for measuring the data in the following discussion, shelter and food each take about 30 percent of the income of nonfarm fam- ilies with low consumption patterns.' Among these families, the uneducated, the unemployed or underemployed, andthe Negro or other minori- ties predominate. Those with incomes of less than $2,000 after taxes have an average age of 63. In the $2,000 to $3,000 a year income class, families are twice as likely as the lowest income families to include children under 18 years of age.2 'Of the Office of Publications, Bureau of Labor Statistic. 'For the first appearance In print of the doctrine of let the buyer beware. see Anthony Fitzherbert. Doke of Huabandric, 1534, In W. H. Hamilton, The Ancient Maxim Caveat Emptor, Yale Law Journal, June 1031. The reference was to horse trading. A The Office of Economic Opportunity commissioned the housing and nonfood studies and the National Cbmminolon on Food Marketing appointed by the President requested the -report on food prices, which It published In June 1966. 3 Atianta, Chicago. Hotsbton, Los Angel. New York, and Washington. 'The BLS has deveioped this definition as a tool for analysis of income and !xpenditareo of poor famlliei to allow for varo- tions in family size. In these terms, an Income of ' 3,000 that provides a given .level of living for a 4-person family would b equivalent to $1,500 for h single consumer, about $1.900 for a retired couple, and $4,500 or $4,600 for a family of 6 or more members, includlng teeage children. 5Consumer Empensdfitrea and Income wth Rmphasfa on Lo-. oos= e Famiies (BIA Report 238-. July 194), p. L 1085

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