Not all goods that are traded in the market have the same importance or have the same characteristics among them. Today we are going to talk to you about one of these types of goods: the inferior good.
When we speak of inferior good we refer to goods that, by increasing people's income, demand of these decreases. This happens by the simple rule that consumers, having more purchasing power, can do without buying this type of goods, so their demand goes down.
That is why it is often said that inferior goods are capable of satisfying human needs even if people have minimal income. For this reason, the number of goods that we can find classified as inferior goods are goods that satisfy needs but at a lower or, socially, less acceptable level.
Inferior goods can be second-hand or used clothing, fast food, or cheap coste, any product that has been used or does not present a good quality.
In short, they are goods that reduce their best before date because of an increase in consumer income. The user is increased income and chooses to choose other offers of better value or quality, rather than this type of goods.
Graphically, inferior goods represent the effect of negative income, whose demand curve as a function of price will be increasing. However, it must be taken into consideration that if said negative value of the income effect exceeds the value of the substitution effect, the curve will turn in another way, originating what is known as the Giffen good. This type of property is classified as a very inferior good (it would be like a subcategory of inferior good).