Boots & Sabers

The blogging will continue until morale improves...


Everything but tech support.

1655, 15 Apr 16

Price Elasticity of Demand for “Made in America”


Nearly three in four say they would like to buy goods manufactured inside the United States, but those items are often too costly or difficult to find, according to the survey released Thursday. A mere 9 percent say they only buy American.

Asked about a real world example of choosing between $50 pants made in another country or an $85 pair made in the United States – one retailer sells two such pairs made with the same fabric and design – 67 percent say they’d buy the cheaper pair. Only 30 percent would pony up for the more expensive American-made one. People in higher earning households earning more than $100,000 a year are no less likely than lower-income Americans to say they’d go for the lower price.

I don’t know that this really tells us much. Of course, if the price difference for the same product is vastly different for “made in America” or not, there is going to be a difference in demand. Nobody is willing to spend an infinite amount of money just to buy something made in America.

On the other hand, there is likely some extra price that some people are willing to spend to buy American made products. This survey question is only one data point and represents a 70% difference in price for an identical consumer good. OK. Whatever. What would be more interesting would be to test that same question with different products and different price points. What if the pants were only 20% more for American made? 10%? 1%? What if instead of pants, it is a car? Home insulation? Furniture? Tablet?

So, OK. The story is moderately interesting, but begs more questions than it answers.


1655, 15 April 2016

1 Comment

  1. Wauky

    People who get all huffy about “buy American” usually mean someone else should do it. Price & quality come first – who has the time to fool around trying to figure out what was made where? The world has become flat.

Pin It on Pinterest