In consumer theory

Consumer theory

Consumer choice is a theory of microeconomics that relates preferences for consumption goods and services to consumption expenditures and ultimately to consumer demand curves. The link between personal preferences, consumption, and the demand curve is one of the most closely studied relations in...

, an inferior good is a good that decreases in demand when consumer income rises, unlike normal good

Normal good

In economics, normal goods are any goods for which demand increases when income increases and falls when income decreases but price remains constant, i.e. with a positive income elasticity of demand...

s, for which the opposite is observed. Normal goods are those for which consumers' demand increases when their income increases.
Inferiority, in this sense, is an observable fact relating to affordability rather than a statement about the quality of the good. As a rule, these goods are affordable and adequately fulfil their purpose, but as more costly substitutes that offer more pleasure (or at least variety) become available, the use of the inferior goods diminishes.

Depending on consumer or market indifference curves, the amount of a good bought can either increase, decrease, or stay the same when income increases.

Examples

Cheaper cars are examples of the inferior goods. Consumers will generally prefer cheaper cars when their income is constricted. As a consumer's income increases the demand of the cheap cars will decrease, while demand of costly cars will increase, so cheap cars are inferior goods.
Inter-city bus

Bus

A bus is a road vehicle designed to carry passengers. Buses can have a capacity as high as 300 passengers. The most common type of bus is the single-decker bus, with larger loads carried by double-decker buses and articulated buses, and smaller loads carried by midibuses and minibuses; coaches are...

 service is also an example of an inferior good. This form of transportation is cheaper than air

Air travel

Air travel is a form of travel in vehicles such as airplanes, helicopters, hot air balloons, blimps, gliders, hang gliding, parachuting or anything else that can sustain flight.-Domestic and international flights:...

 or rail

Rail transport

Rail transport is a means of conveyance of passengers and goods by way of wheeled vehicles running on rail tracks. In contrast to road transport, where vehicles merely run on a prepared surface, rail vehicles are also directionally guided by the tracks they run on...

 travel, but is more time-consuming. When money is constricted, travelling by bus becomes more acceptable, but when money is more abundant than time, more rapid transport is preferred.

Inexpensive foods like bologna, hamburger, mass-market beer, frozen dinners, and canned goods are additional examples of inferior goods. As incomes rise, one tends to purchase more expensive, appealing and nutritious foods. Likewise, goods and services used by poor people for which richer people have alternatives exemplify inferior goods. As a rule, used and obsolete goods (but not antiques

Antiques

An antique is an old collectible item. It is collected or desirable because of its age , beauty, rarity, condition, utility, personal emotional connection, and/or other unique features...

) marketed to persons of low income as closeouts are inferior goods at the time even if they had earlier been normal goods or even luxury goods.

Others are very inconsistent across geographic regions or cultures. The potato

Potato

The potato is a starchy, tuberous crop from the perennial Solanum tuberosum of the Solanaceae family . The word potato may refer to the plant itself as well as the edible tuber. In the region of the Andes, there are some other closely related cultivated potato species...

, for example, generally conforms to the demand function of an inferior good in the Andean region where the crop originated. People of higher incomes and/or those who have migrated to coastal areas are more likely to prefer other staples such as rice or wheat products as they can afford them. However, in several countries of Asia, such as Bangladesh

Bangladesh

Bangladesh , officially the People's Republic of Bangladesh is a sovereign state located in South Asia. It is bordered by India on all sides except for a small border with Burma to the far southeast and by the Bay of Bengal to the south...

, potato is not an inferior good, but rather a relatively expensive source of calories and a high-prestige food, especially when eaten in the form of "French fries

French fries

French fries , chips, fries, or French-fried potatoes are strips of deep-fried potato. North Americans tend to refer to any pieces of deep-fried potatoes as fries or French fries, while in the United Kingdom, Australia, Ireland and New Zealand, long, thinly cut slices of deep-fried potatoes are...

" by urban elites.

Some inferior goods are so consistent that they can be seen as economic indicators. One such is instant noodles

Instant noodles

Instant noodles are dried or precooked noodles and are often sold with packets of flavoring including seasoning oil. Dried noodles are usually eaten after being cooked or soaked in boiling water for 2 to 5 minutes, while precooked noodles can be reheated or eaten straight from the packet...

, where an early 2005 increase in the Thai

Thailand

Thailand , officially the Kingdom of Thailand , formerly known as Siam , is a country located at the centre of the Indochina peninsula and Southeast Asia. It is bordered to the north by Burma and Laos, to the east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the...

 "Mama Noodles Index" (the number of the popular Mama-brand instant noodles sold in that country) was seen as a sign of weakness after about ten years of stability.

Giffen goods

A special type of inferior good may exist known as the Giffen good

Giffen good

In economics and consumer theory, a Giffen good is one which people paradoxically consume more of as the price rises, violating the law of demand. In normal situations, as the price of a good rises, the substitution effect causes consumers to purchase less of it and more of substitute goods...

, which would disobey the "law of demand

Law of demand

In economics, the law of demand is an economic law that states that consumers buy more of a good when its price decreases and less when its price increases ....

". Quite simply, when the price of a Giffen Good increases, the demand for that good increases. This would have to be a good that is such a large proportion of a person or market's consumption that the income effect

Income effect

In economics, the consumer's preferences, money income and prices play an important role in solving the consumer's optimization problem...

 of a price increase would produce, effectively, more demand. The observed demand curve

Demand curve

In economics, the demand curve is the graph depicting the relationship between the price of a certain commodity, and the amount of it that consumers are willing and able to purchase at that given price. It is a graphic representation of a demand schedule...

 would slope upward, indicating positive elasticity

Price elasticity of demand

Price elasticity of demand is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price. More precisely, it gives the percentage change in quantity demanded in response to a one percent change in price...

.