Inferior Goods are a product portfolio of high-brand value goods that are sold at higher prices and necessity-based products for the daily life of the population.
We can segment an inferior good category into two subcategories of Giffen and Veblen Goods.
Giffen Goods violate the demand law of economics and they are a necessity-based product. Here we can include wheat, rice, maze, water, and even pharmaceutical, and oil products. With the Giffen goods as the price slope moves upwards the demand curve remains in aligned correlation with it and does not have an inverse correlation relative to the change of prices of these products. This is due to the biology and the requirement of specific goods to provide and secure their family’s lives. This includes a variety of nutritional products and other products required for an individual to fulfill his/her business obligations to have a continuous inflow of capital and meet the obligations necessary for survival. There is a distinction between inferior and Giffen goods provided by another sub-segment of the inferior goods category. This segment includes luxury products classified as Veblen Goods.
Veblen Goods are luxury-based products that have a high price point based on the value of the brand due to its innovative components and marketing/advertising strategy in alignment with product value or the tradition and identity behind the brand. Although, inferior goods it is subject to the law of demand where the relative change in price movement upward the demand for such goods reduces. We also have to take into account that these goods have a higher substitute portfolio of products on the market thereby causing the demand curve to move downwards in case the products become too expensive. The necessity and the substitute product portfolio on the market are the key differences between Giffen and Veblen goods. In the Veblen Product Category, we can include cosmetic, textile, and accessory product categories alongside automotive industry products.
Economist 🤍
Live Life in a positive manner 🥰
Sending Love to You 💙