Normal good

As a normal good is defined in economics and there especially in microeconomics a class of goods that thereby distinguish themselves from others that changes according to a change in income of the consumer demand for them in a specific way. Your specific classification criterion is controversial in the literature.

Definition

This article uses the following - based on the definition of a normal good - probably most common:

Definition: We call a good as normal if his demand with rising income (absolute ) increases. Also referred to as inferior when demand (absolute) decreases.

Differences in definitions

Part of the literature assumes, in derogation from the above definition before other distinctions. For an overview, reference is made to said main part.

Properties

When adding in the definition of the income elasticity of a good just then (and only then ) is normal, if the income elasticity is positive.

It should be noted that the characterization of a property is not linked as normal or inferior firmly with a good, but always from the external circumstances ( absolute level of income, prices, preferences ) depends. The same material can represent with a low income is a normal good, however, be transformed into an inferior good at a certain income level so without further notice.

Example

• With an income of 1000 euros a month simple supermarket bread is consumed for 10 euros. Once the income has risen to 2,000 euros, making you look more bread from the bakery opposite and the consumption of plain bread drops to 3 euros. Simple supermarket bread is an inferior good in this example.
• With an income of 1000 euros to be spent per month for 30 euros for movie tickets. Once the income has risen to 2,000 euros, an increase in expenditure on cinema tickets at 45 euros. Income is thus increased and spending on cinema programs have also increased. The movie transitions are a normal good in this example.