Inferior, Normal & Luxury Goods: A Consumer's State Of Finance?
Mostly, the expenditures or the spending habit of people is mostly a direct reflection of their earning or income. In Nigeria for example you tend to know when someone's income increases; their need for a specific kind of good either increases or decreases. For example, garri (cassava flakes) is a type of food that's considered to be affordable by anyone in Nigeria.
However, when people buy it more often, it is like a direct Interpretation of their state of finance. This is what i'll exactly call inferior goods. These are types of commodities which the need for them actually decreases the moment people who buy them experience a positive change in income.
A positive change means having a higher pay at work while a negative change means losing one's job or being demoted, now a positive change means more "money" while a negative change means "less money". In Nigeria for example, people stop eating garri when their income increases, they rather choose a protein substitute like wheat meal.
The Main Reason For Inferior Goods
Now let's look at inferior goods as a concept. We must understand that the real reason for inferior good is because of low income, having money makes people pick normal goods. This is because normal goods are type of goods that people would originally go for if the conditions are quite right.
So inferior goods are the opposite of normal goods, however they're foods that are close substitutes despite the fact that the different between them is the spending power of a potential consumer.
When you look at some countries like Nigeria and Venezuela, the citizens of these countries are striving hard to live through the economic conditions of their countries, the adjustability to Inflation, fewer jobs on the market, bad leadership and all that eventually makes people go for inferior goods rather than normal goods, we have to understand that the meaning of "inferior" is "less"
Brand & Brand-less Substitute
This signifies that "less" means affordability. It's a state where people have to select a "less" attractive option because they cannot afford the regular options. Take a lot at the human society, we buy brand. The higher the brand choice, the more our financial capacity is Interpreted.
** Apple** for example is a brand that represents luxury and sophistication, the brand after Apple is Samsung. Inasmuch as there might be a bizarre representation of which brand holds higher quality. We have to understand that most people's preference for the two brand often Interprets their technical "know-how" and most importantly financial status.
There are other "brand-less" substitutes in the market which typically comes as a saving grace especially for people who cannot afford brands. This is to say that inferior goods are regularly not recognized or reckoned with especially because it holds no qualitative substance.
Normally people see the need for luxury when their Income increases, for example taking a cab for a distance which can be covered by trekking is an example. However let's look at a good can be an inferior good as well as normal goods.
Garri for example, is a Nigerian food which the rich and poor can actually afford and eat. This is because it is a good that one of a kind, However the dimension at which it is consumed is what gives it a different feel. The level of ingredients added differently when consuming it is what actually spells people's financial capabilities and not the good in itself.
This means that we have goods that can actually pass off as both inferior and normal. Sometimes, people's ability to switch up on different types of food and not actually sticking to one would somehow translate or explain their total understanding into the concept of inferior or normal goods.
Quality & Price
However, we mostly equate quality to price and this is because sometimes we feel what is pricey would actually translate to quality. But this isn't always true. An inferior good can actually do a very good job at satiating or taking care of a need, it's just that mostly we often go for more colorful variety when the means becomes available.
This is why the demand for inferior goods decreases overtime. People will frequently equate a negative meaning to a particular kind of goods and this is majorly because these goods should be inferior goods, and they're actually frowned upon especially when the standard of living of people increases, and they would need to up the quality of their lives as well as begin to live differently.
At almost every point in time everyone would have experienced this. In modern world, we are having better substitutes for inferior goods more than it used to be in the past and right now, brands, company are beginning to make goods in-between inferior and luxury.
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You do not have to have a negative change to have less money. The minimum pension, which is 28 500 Hungarian Forint (HUF) (approximately $89.44 USD) was not changed in the previous 15 years in my country (in Hungary). But the buying power of the money is decreasing every year (the prices of many necessary things practically doubled in the last 10 years), so even if the people's pensions was not decreased, they still receive less, because they can buy less in the stores because of the increased prices.
The government of Hungary intentionally keeps the most of us (me too) under the local minimum wage.
Have a nice day. All the best. Greetings and much love from Hungary.
You are actually very correct when you say one does not need negative change to have less money.
But it is also a contributing factor. In the situation of Hungary I can see that the peg that comes with the minimum wage and the rate of inflation people lose money faster than they actually earn.
However, In the situation I tried to portray, people's quality of life are generally affected when there is a negative shift in their income and this aspect is somewhat undeniable. Thanks for your comment.
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I am not really sure if people will only pursue the brand items. It's nice to have a brand item but I tend to think that I prefer the prices over the brand added price. It kind of depends but I do know that most of those cheap items don't last as long. However even the brand names have been shortening their duration life for items as well so I wonder where things will go.
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Brand buying has become a "thing". We know brand is necessarily not quality as too much concentration on a brand can actually make them demean their quality. In Nigeria going after expensive brand might showcase how wealthy you are.
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This is a quality review, while focused on the economic perspective, it's also a good thing to look at the mental and cognitive perspective. If you notice, most obese individuals are those on high income categories. This also suggests that knowledge plays an important role people's purchasing choices.
Another important fact is attitude, people's attitude towards a commodity may also occlude their reasoning and judgement of value. However, most often than none, it starts with finance.
Yeah thanks for pointing out the cognitive and mental perspective because these aspects are also instrumental in changing the narratives. Like you said, finance is probably the most considered aspect.
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Please tell me I'm not the only one who finds garri the best form of meal, money or not?
I don't term financial abilities to what people buy ... Infact, I hardly follow trends. Lol.
I can eat anything I want whenever I want, as long as I can afford it. But omoh... Garri soaked in cold water with ice block has a different feeling of its own. Especially in heat season...😂😅
Same goes with whatever I want for myself. Although the comma is "if i can afford it"
Lol
Yeah, it's not everyone that does this. It's an economic concept that's prevalent, yet not a lot of people are subconsciously aware of it. But it's probably evident in our daily lives especially if we're economically inclined.
About Garri, I take it not because I'm broke of my financial standing, I take it when it comes especially when it's hot like you said and you take it with cold water. That said, even in cinematic depiction in Nollywood, it's often synonymized with poverty, even if it's not really so.
Well, that's the stereotypes we have in Nigeria. Riding bicycle means you're poor but in other countries especially South Korea bicycles are used even by the richest of the rich. Smh
Inferior goods in our present economy are not inferior good anymore. Everything is damn cost. I understand your point because sometimes some of these overpriced goods are not even good. To me no food is too cheap or too cost, when you blend garri with confirm soup you go like am. I love food oo chai
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