Inferior good

Inferior good – definition

An inferior good is a good that people demand less of when their income rises (or more of when their income falls). Inferior goods have a negative income elasticity of demand.

• More on income elasticity of demand

• See Giffen goods

Inferior goods can be contrasted with ‘normal’ goods which have a positive income elasticity of demand.

Inferior and normal goods can be illustrated by ‘Engel curves’, after 19th century German statistician, Ernst Engel.