Agricultural Economics Department
Date of this Version
2017
Citation
Online Journal of Rural Research & Policy: Vol. 12: Iss. 2.
Abstract
This study investigates retailing activity and trends at different spatial scales for the last quarter of a century, from 1990 to 2015, for Nebraska using data from the Nebraska Department of Revenue. The primary unit of measurement used to assess the retail strength was Pull Factor. The Pull Factor (PF), is widely used to identify and measure leakage and/or capture of retail trade across political boundaries as well as identifying trends over time. Retailing is an important sector of any economy at all geographic levels and is watched carefully as an indicator of overall economic performance. For 2015 total taxable retail sales for the state was over 23 billion nominal dollars (slightly more than 13 percent of State Gross Product) for Nebraska. Results showed that population was the single largest factor that affected retailing activity. An analysis of top retail performers based on population class showed that all but one town employing the tax shift implications, by levying a local sales tax under the Local Option Revenue Act (applicable to cities) or Nebraska Revenue Statue 13-319 to 13-325 (applicable to counties), associated with their being trade-capture municipalities. This study also found that the higher (lower) the purchase index for motor vehicles, the lower (higher) the county retail pull factor for other taxable sales activity. This was because on average rural county residents spent relatively more on motor vehicle purchases than their metropolitan county cousins, which left less disposable income for other retail activity given no drastic differences in median household income levels across the state. Rising unemployment and income stagnation, which reduced buying power and uncertainty among consumers, during the most recent recession years, slowed the growth of the retail sector significantly between the 2005 and 2010 period relative to both the pre-and post-time periods for the state. Recession consequences did not appear to be uniform across the town/city size classes of Nebraska communities. The smallest class of towns, less than 500 people, saw an increase in retail, most likely because retailing services are almost entirely inelastic goods and services that people need whatever the economic climate and the individual’s economic condition. The metropolitan areas however saw a slight increase in retail dollar volume between 2005 and 2010 while their share of the state’s total retail sales declined slightly.
Comments
Open access
https://doi.org/10.4148/1936-0487.1082