I was reading an article in Forbes June 8, 2009 issue called "Wal-Mart's Weight Effect"
The article said the following:
...Our evidence is indirect, but we think it shows that price changes can have subtle and sometimes hard-to-detect consequences. Any change in price results in two phenomena. The first is the substitution effect: a change in consumption mix due to a change in relative prices. If a bag of salad is $2 and a bag of potato chips is $1, then the price of salad in terms of chips is two bags and the price of a bag of chips is half a bag of salad. If a Wal-Mart opens and reduces the price of salad to $1 a bag and the price of chips to 75 cents a bag, the "salad price" of chips has risen (from 1/2 bag to 3/4 bag) and the "chip price" of salad has fallen from 2 bags to 4/3 bags. In short, salad has become cheaper relative to chips.
The other effect from a change in prices is the income effect, which is a change in consumption due to a change in purchasing power. If Wal-Mart sells food at lower prices--even if our incomes don't change--every dollar can buy more. Therefore, we're richer.
I find this awesome. Because while the government is spending a fortune trying to figure out how to make poor people healthier; the CHEAP and easy answer is staring them right in the face!
As the great author (Art Carden) of the article said:
Do you want to make poor people healthier? Then restricting the growth of discount chains is the last thing you should do. Instead, repeal programs that distort incentives- like agricultural subsidies that make junk food made from corn and soybean derivatives artificially cheap. Next, cut payroll taxes. With more take-home pay in their pockets, lower-income workers can afford to buy foods that are better for their health.
This guy is suggesting the opposite of what the government is doing. I find that fascinating. As if liberals don't screw up enough, they now make it more expensive for NYC residents to stay thin, or lose weight.