Superior good

As the superior good is referred to in the economics and there especially in microeconomics sometimes a class of goods for which demand increases more than proportionally to the increase in income as income grows.

Classification and definition

In general, a distinction is made in investigating the question of how an increase in income on the demand for goods affects only between normal goods - goods whose demand in the income (absolute) increases - and inferior goods - goods whose demand in the income (absolute) decreases. However, some of the literature used a partly contradict this detached, partially finer distinction that is presented in an overview in its various variants in the article Inferior Good # Divergent definitions. Particular place there on a regular basis, the term of the superior good input; This is usually defined as follows:

Definition: We call a Good as superior, if his demand disproportionately with increasing income increases, that is, when its share of the total expenditure increased due to the increase in income.

Properties

When adding in the definition of the income elasticity of a good is if and only superior if the income elasticity is greater than 1.

Example

With an income of 2,000 euros a month champagne is drunk for 30 euros. Once the income has risen to 4,000 euros, more and higher-quality champagne for 120 euro is consumed. Income is thus increased by 100 percent, the cost of Champagne have risen by as much as 300 percent. Champagne in this example is therefore a the superior good, because the percentage increase in spending on champagne is greater than the percentage increase in income.