Inferior Goods

Consumer choice 1 As wealth rises, consumers will substitute away from less costly inferior goods and services, choosing higher priced alternatives.

Giffen good - Empirical evidence 1 All Giffen goods are inferior goods, but not all inferior goods are Giffen goods.

Inferior good 1 Inferiority, in this sense, is an observable fact relating to affordability rather than a statement about the quality of the good. As a rule, these goods are affordable and adequately fulfill their purpose, but as more costly substitutes that offer more pleasure (or at least variety) become available, the use of the inferior goods diminishes.

Inferior good - Examples 1 There are many examples of inferior goods. Several economists have suggested that shopping at large discount chains such as Walmart vastly represent a large percentage of goods referred to as inferior. Cheaper cars are examples of the inferior goods. Consumers will generally prefer cheaper cars when their income is constricted. As a consumer's income increases the demand of the cheap cars will decrease, while demand of costly cars will increase, so cheap cars are inferior goods.

Inferior good - Examples 1 As a rule, used and obsolete goods (but not antiques) marketed to persons of low income as closeouts are inferior goods at the time even if they had earlier been normal goods or even luxury goods.

Internet fraud - Online auction and retail schemes 1 Online retail schemes involve complete online stores that appear to be legitimate. As with the auction scheme, when a victim places an order through such a site, their funds are taken but no goods are sent, or inferior goods are sent.

Demand curve - Shift of a demand curve 1 When income increases, the demand curve for normal goods shifts outward as more will be demanded at all prices, while the demand curve for inferior goods shifts inward due to the increased attainability of superior substitutes

Redlining - Retail 1 They may be exploited by other, often smaller, retailers who charge them higher prices and/or offer them inferior goods.Retail Redlining: Definition, Theory, Typology, and Measurement Denver D’Rozario Journal of Macromarketing, Vol

Wealth effect - Effect on individuals 1 Demand for some goods (especially Inferior goods) typically decreases with increasing wealth. For example, consider consumption of cheap fast food versus steak. As someone becomes wealthier, their demand for cheap fast food is likely to decrease, and their demand for more expensive steak may increase.

Marshall Jewell - U.S. Minister to Russia 1 Jewell, who was an observant man, noticed that inferior goods not made in the United States were falsely sold on the open Russian markets under an United States of America|American name. Jewell appealed to the Russian government that this practice harmed authentic American trade with Russia. Jewell was able to negotiate a specific treaty that protected United States trademarks.Holloway, pp

Rosser Reeves - Advertising style 1 He insisted the product being sold actually be superior, and argued that no amount of advertising could move inferior goods

Engel Curve - Shape 1 For inferior goods, the Engel curve has a negative gradient. That means that as the consumer has more income, they will buy less of the inferior good because they are able to purchase better goods.

Antisemitism in Norway - Early 20th century media, public opinion and policy 1 * 'Unscrupulous merchants and tradespeople' - trade associations, including retailers, wholesalers, and craftsmen, were deeply suspicious about what they alleged were immoral, damaging, and even illegal activities from their Jewish competitors. Jewish merchants were various accused of overpricing for items and also Dumping (pricing policy)|dumping, usually for inferior goods. Jews were excluded from guilds and trade associations.

Income elasticity of demand - Interpretation 1 * A negative income elasticity of demand is associated with inferior goods; an increase in income will lead to a fall in the demand and may lead to changes to more luxurious substitutes

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