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#SABCNews: Price geography: Bulk of bargains, sales take place on the edges of Joburg – SABC News

#SABCNews: Price geography: Bulk of bargains, sales take place on the edges of Joburg – SABC News
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This festive season the bulk of bargains and sales took place in large markets on the edges of the City of Johannesburg.

The SABC News team took to the streets and shopping malls to find out what the economic geography of Johannesburg can teach us about low prices and large markets.

The study of economic geography of the location of factors of production in space occupies a relatively small part of standard economic analysis.

The study of economic geography plays at best a marginal role in economic theory. So, we set out to flip the script, starting in the South West of the city at China Mall – one of the largest markets famed for its low prices – to test economist Paul Krugman’s assertion that low prices and elastic prices are often found in large markets.

The prices are low and so elastic that they are negotiable in areas including Oriental Plaza and surrounding areas in Fordsburg.

The question that the crew wanted to answer was, “Could it be that Auckland Park is the boundary of the proverbial wealthy north versus the affordable South?”

Much of the city is still marked by special Apartheid, but the leafy north spreads out from Auckland Park. The crew went to Cresta in the North West. In Cresta, eyelashes that were found at China Mall for R20 cost upwards of R240.

Shoppers say they are paying for the air-conditioning, the real estate, the safe parking and surveillance, the safety and the lack of queues at ATM’s and cashiers.

In Sandton City, Africa’s richest square mile – home of the well healed, the only thing for R20 is the parking. This is the home of see and be seen and the famous glittering Diamond Walk. There handbags cost as much as an RDP house. An expensive eyelid would be bat if you attempted to bargain a price here.

The price geography is a map of the class system of the city. But some are bucking the trend and shopping all over the city to save money this festive season. For now, it seems economist Paul Krugman was right!

It is a case of the larger the market the lower and more elastic the price.  Author- Thandeka Gqubule-Mbeki 

 

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