The Unequal Gains from Product Innovations
Prices for everyday purchases at grocery and drug stores are increasing faster for low-income Americans than their wealthy counterparts, according to new research from Harvard University. The Unequal Gains from Product Innovations finds that retail prices are increasing by more than 2 percent per year for goods purchased by consumers with incomes below $30,000, but just 1.4 percent per year for those with incomes above $100,000. Most of the price discrepancy can be attributed to wealthy consumers’ habit of buying premium brands, which tend to have more stable prices over time, according to the study.