Growing up in the Tri-State Area (NY-NJ-PA), the Jersey Shore symbolized by the long Boardwalk has always attracted me. A short drive from most Jersey towns, the boardwalk greets vacationers of all classes with its beachfront shops of funny T-shirts, fudge, and saltwater taffy.
The jewel of the shore is Atlantic City with its high rise casino hotels occupying much of the two blocks just off the boardwalk. The city of just less than 40,000 people is known for its glamour. However, living in the shadows of the famous casinos lives a desperate population with a median income of $29,000 and over 34 percent of households living in poverty.
Nelson Johnson brings us back to an early time narrating how the city came to be.
Market Segmentation: A walk down the demand curve
The birth of Atlantic City owes a debt of gratitude to Johnny Pitney and Samuel Richardson. These two men convince the New Jersey State Legislature to build a railroad from Camden to Atlantic City. Richardson was an iron and glass entrepreneur. He understood that to compete with the popular beach town of Cape May, they would need to design a higher end train line to attract wealthy tourist. The first train on the Camden-Atlantic Railroad offered $3 round-trip tickets and $2 one-way tickets in 1854. As the number of tourist grew, Richardson added a second line (Philadelphia-Atlantic Railroad) with less amenities for $1.50 round-trip ($1 one-way trips) in 1876. A third line with wooden seats and no windows drop the price further to $1.
This process of adding additional services at both lower quality and price is a method use by business to earn greater profit.
A second benefit of providing railroad access to this area is the increase in demand for property. Both the Camden and Philadelphia Railroad companies purchased lots of land at $5 an acre. By the 1870's these properties were selling for $300 an acre as the railroads were transporting 400,000 - 500,000 people a year.
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