Saturday, July 28, 2007

Garage Sale as Economic Indicator

I threw an impromptu garage sale today piggybacking on my neighbor's sale. Our signs boasted "2 Sales" suggesting bountiful synergy.

But the bottom line is that even in Michigan's dismal economy, I cannot compete with China. I cannot compete with the dollar store (also China). I cannot compete with Walmart (China). And Ann Arbor's Salvation Army Store is in a wholly other league.

My neighbor and I had assorted goods--furniture, toys, electronics, guy-oriented gadgets, sporting goods, bizarre kitsch, flower vases, small appliances, clothing, a few books. We were not skewed toward any typical garage sale demographic (single mothers, young mothers, new mothers, marginally employed immigrants, retired couples, college students, laid-off workers, professional resale "cherry pickers," mothers with small children looking for a cheap Saturday activity, elderly survivors of the Great Depression, the nattily dressed luxury car drivers). We were not overpriced.

What can you learn from a garage sale? Is it in any way an informative economic indicator? On a microeconomic level, yes. Things are only worth what someone will pay for them. And expectations in the United States have been conditioned by abundant, cheap things made in China. Shoppers wanted to pay 25 cents for things that would command $25 in a discounted retail environment. And when asked if they could go to 50 cents they balked. Was 50 cents really too much for them? After all, Michigan's economy is in dire straights. Were they hoping that I needed to sell these things, so they could get a mean bargain? Did they need me to be more desperate to sell than they were to purchase?

Monday, I will take all that remains to the Salvation Army where I will be compensated with a receipt for tax purposes. Next time, I will skip the nickel and diming and just go for the tax receipt.