Blog
Inferior Goods
27th March 2008
Jim blogged today on his Business Studies blog about attempts by Pontins to revamp their Uk holiday camp business. Instinctively I thought that I could use this as an example of an inferior good - a product with a negative income elasticity of demand. What other examples do colleagues use for inferior goods in their teaching? Off the top of my head:
White own label bread Economy baked beans Tinned meat Bus transport Cigarettes
I am taking the aggregate view here - because income elasticity of demand will vary from person to person depending partially on our own individual preferences.
Anymore examples?
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.