In class this semester as well as last semester, we briefly discussed normal goods and inferior goods. A normal good is defined as a good for which demand increases when income increases, and for which demand falls when income falls. On the other hand, an inferior good is a good for which demand falls when income increases, and for which demand increases when income falls. Simple enough definitions.
However, then our teacher told us most goods are considered normal goods, but gave the example of Ramen noodles as an inferior good. This made me laugh, because personally, I enjoy Ramen noodles and I can’t think of a time when we haven’t had them, regardless of income increases or a promotion of my parents and/or myself. This got me thinking, what are more examples of inferior goods and normal goods?
The more I learn about economics, the more I see that economists seem to like to lump actions of people/concepts/goods into specific, clearly defined categories or groups. Then it hit me, there aren't really universally accepted inferior and normal goods. They can vary from person to person. For me a normal good is my iPhone, and an inferior good would be another phone. Yet, some of my friends would prefer a different phone over an iPhone, regardless of their high incomes just because they see a keyboard or other qualities important. And a Ferrari would be a normal good for most guys I know, but for me, I would never want a Ferrari, regardless of my income. Also, fast food may seem like an inferior good over a home cooked meal or another restaurant, yet a lot of people I know would rather go to Taco Bell than an expensive Mexican restaurant. Normal and inferior are subjective words, and each household and each person’s idea of an inferior and normal good will vary.