Buying Power

All of the projects encountered the issue of determining the buying power of the area surrounding the Mystery District. Traditionally, economic studies have not been performed on low-income areas, because it was typicaly unnecessary to compare the spending power of two differing income areas. However, people who fit into a lower income group live in the neighborhoods surrounding downtown Muncie. This fact made it necessary for the students to determine a more useful and appropriate number for the detailing of how much money lower income groups tend to spend. Most of the reports incorporate information from two new studies, The Market Potential of Inner-City Neighborhoods: Filling the Information Gap, by Robert Weissbourd and Buying Power at the Beginning of a New Century: Projections for 2000 and 2001, by Jeffery M. Humphreys. These reports discuss the importance of using income density (rather than just income) in market studies of lower income areas. Neighborhoods occupied by people with a lower incom are generally more densely populated. This density can increase the actual spending power numbers so that they are equal to or above those of higher-class areas. Another problem with noting only the income (instead of income density) of lower income areas is that much of the income may not be reported, often giving the lower income neighborhoods a higher spending power than is noted by an income statistic. Using income density would take these issues into account.