The Cyclical Nature of Household Purchases in Informal Markets

This research was designed to reveal the magnitude of continued use of informal suppliers by household consumers as well as the relationship of such use with general market conditions. The results of this study are based on national probability samples of households in the United States which reported their purchases across 15 broad categories of goods and services in 1981 and 1985. The authors conclude that household consumer use of informal suppliers in the aggregate has no apparent relationship to the business cycle. In contrast, there is some indication that the individual categories of goods and services reflect a cyclical relationship with the business cycle. In general,“luxury” goods and services expanded while the more“basic” goods and services declined between 1981 and 1985. An important exception is the growth in informal retailing in the face of strong economic conditions.