Inferior Goods

inferior goods

Inferior Goods are the types of those goods for which demand decreases as income increases and vice versa. Here we have discussed what are inferior goods in detail with examples.

What are Inferior Goods?

Inferior goods are products for which demand decreases as consumer income increases. This is in contrast to normal goods, which are products for which demand increases as consumer income increases.

The reason for this inverse relationship between income and demand for inferior goods is typical because they are considered low-quality or lower-priced substitutes for higher-quality products.

As consumers become wealthier, they tend to shift their preferences toward higher-quality goods, which causes a decrease in demand for inferior goods.

Examples of inferior goods include generic or store-brand products, low-quality fast food, and used clothing. In contrast, examples of normal goods include luxury items like high-end electronics, fine dining experiences, and designer clothing.

Inferior Goods Meaning

The term “inferior” can have different meanings depending on the context in which it is used.

  • In economics, as we discussed earlier, “inferior” refers to a type of good for which the demand decreases as income increases.
  • This is because such goods are considered lower-quality or less desirable substitutes for higher-quality products.
  • Outside of economics, “inferior” can mean lower quality, value, or importance compared to something else.

For example, an inferior product is one that is of lower quality or less reliable than a competing product. An inferior person is someone who is considered to be of lower social or moral standing compared to others.

Definition of Inferior Goods

Inferior goods are defined as goods for which demand decreases as consumer income increases, while the demand for normal goods increases as consumer income rises.

An Inferior good is a type of good whose demand declines when income rises. In other words, the demand for inferior good is inversely related to the income of the consumer.

For Example, there are two commodities in the economy. Wheat Flour and Jowar Flour and consumers are consuming both.

Inferior Goods Examples

Here are some examples of inferior goods:

  • Generic or store-brand products
  • Used goods
  • Low-quality fast food
  • Public transportation
  • Cheap wine

A Good can be a normal good for the consumer at some levels of income and inferior good for her at other levels of income.

Inferior Good

Normal Good



Travel By Train

Travel by Aeroplane

Travel by Bicycle

Travel by Car

Wick Stove

Gas Stove

Generic or store-brand products

These are lower-priced substitutes for name-brand products. As consumers’ incomes increase, they tend to shift towards buying more expensive, higher-quality name-brand products, causing a decrease in demand for generic or store-brand products.

Used goods

Used goods are typically cheaper than new goods, but they may be considered lower-quality substitutes. As consumers’ incomes increase, they may choose to buy new goods instead of used goods, leading to a decrease in demand for used goods.

Low-quality fast food

Fast food is a cheaper and more convenient alternative to home-cooked meals or restaurant meals. However, as consumers’ incomes increase, they may prefer to eat at more expensive, higher-quality restaurants, causing a decrease in demand for low-quality fast food.

Public transportation

As incomes rise, consumers may choose to buy cars or use ride-sharing services instead of public transportation, causing a decrease in demand for public transportation.

Cheap wine

Cheap wine may be considered a lower-quality substitute for more expensive, higher-quality wine. As incomes rise, consumers may choose to buy more expensive, higher-quality wine instead of cheap wine, leading to a decrease in demand for cheap wine.