Superior good

In economics, and especially in microeconomics, a class of goods is sometimes referred to as a superior good , the demand for which increases disproportionately to the increase in income as income increases.

Classification and definition

As a rule, when examining the question of how an increase in income affects the demand for goods, a distinction is only made between normal goods - goods whose income demand increases (absolute) and inferior goods - goods whose income demand decreases (absolute) . A part of the literature, however, uses a partly contradicting, partly finer distinction, which is summarized in its different variants in the article Inferiores Gut # Deviating Definitions . In particular, the concept of the superior good is regularly used there ; this is usually defined as follows:

Definition: A good is referred to as superior if its demand increases disproportionately with increasing income, i.e. if its share of total expenditure increases as a result of the increase in income.

properties

Including the definition of income elasticity , a good is superior if and only if the income elasticity is greater than 1.

example

With an income of € 2000, champagne is drunk for € 30 per month. After the income has risen to 4000 €, more and higher quality champagne is consumed for 120 €. So income has grown by 100%, but spending on champagne has even increased by 300%. Champagne is therefore a superior good in this example, since the percentage increase in expenses for champagne is greater than the percentage increase in income.

Applications

Superior goods are discussed as a possible explanation for the increasing state quota formulated in Wagner's law . State goods such as B. school and university education, state / university hospitals, statutory pensions, police and legal security this character has been assigned, since their consumption by the population has increased disproportionately over time, which has led to an increase in government spending that exceeds the percentage increase in gross domestic product should.

literature

Michael Heine and Hansjörg Herr: Economics. Paradigm-oriented introduction to micro- and macroeconomics. Oldenbourg, Munich 2013, ISBN 978-3-486-71523-1 .
Johannes Natrop: Principles of Applied Microeconomics. 2nd edition Oldenbourg, Munich 2012, ISBN 978-3-486-71315-2 .
Jochen Schumann, Ulrich Meyer and Wolfgang Ströbele: Basics of the microeconomic theory. 9th edition. Springer, Heidelberg u. a. 2011, ISBN 978-3-642-21225-3 .
Susanne Wied-Nebbeling and Helmut Schott: Fundamentals of microeconomics. Springer, Heidelberg a. a. 2007, ISBN 978-3-540-73868-8 .

Individual evidence

↑ See in particular the standard works in use worldwide, Hal Varian : Intermediate Microeconomics. A modern approach. 8th edition. WW Norton, New York and London 2010, ISBN 978-0-393-93424-3 , pp. 143 ff .; Andreu Mas-Colell, Michael Whinston, and Jerry Green: Microeconomic Theory. Oxford University Press, Oxford 1995, ISBN 0-195-07340-1 , p. 25 and N. Gregory Mankiw and Mark P. Taylor: Grundzüge der Volkswirtschaftslehre. 4th edition. Translated by Adolf Wagner and Marco Herrmann. Schäffer-Poeschel, Stuttgart 2008, ISBN 978-3-7910-2787-6 , pp. 79 f .; also, inter alia, Hal Varian : Microeconomic Analysis. WW Norton, New York and London 1992, ISBN 0-393-95735-7 , p. 117; Geoffrey A. Jehle and Philip J. Reny: Advanced Microeconomic Theory. 3rd ed. Financial Times / Prentice Hall, Harlow 2011, ISBN 978-0-273-73191-7 , p. 56; Friedrich Breyer: Microeconomics. An introduction. 5th edition. Springer, Heidelberg a. a. 2011, ISBN 978-3-642-22150-7 , p. 143.

↑ See Heine / Herr 2013, p. 40; Natrop 2012, p. 80 ff .; Schumann / Meyer / Ströbele 2011, p. 65 f .; contrary to Wied-Nebbeling / Schott 2007, p. 48 f., who interpret superior goods as synonymous with the common definition of normal goods.

↑ Unfortunately, this is also inconsistent. It is usually given by, cf. the article income elasticity . ${\ displaystyle \ eta _ {i} \ equiv {\ frac {\ partial x_ {i} (\ mathbf {p}, y)} {\ partial y}} {\ frac {y} {x_ {i} (\ mathbf {p}, y)}}}$
↑ cf. Wigger, Berthold: "Grundzüge der Finanzwissenschaft" Springer, Heidelberg 2006, ISBN 3-540-28169-X , especially pp. 9-11

[1] See in particular the standard works in use worldwide, Hal Varian : Intermediate Microeconomics. A modern approach. 8th edition. WW Norton, New York and London 2010, ISBN 978-0-393-93424-3 , pp. 143 ff .; Andreu Mas-Colell, Michael Whinston, and Jerry Green: Microeconomic Theory. Oxford University Press, Oxford 1995, ISBN 0-195-07340-1 , p. 25 and N. Gregory Mankiw and Mark P. Taylor: Grundzüge der Volkswirtschaftslehre. 4th edition. Translated by Adolf Wagner and Marco Herrmann. Schäffer-Poeschel, Stuttgart 2008, ISBN 978-3-7910-2787-6 , pp. 79 f .; also, inter alia, Hal Varian : Microeconomic Analysis. WW Norton, New York and London 1992, ISBN 0-393-95735-7 , p. 117; Geoffrey A. Jehle and Philip J. Reny: Advanced Microeconomic Theory. 3rd ed. Financial Times / Prentice Hall, Harlow 2011, ISBN 978-0-273-73191-7 , p. 56; Friedrich Breyer: Microeconomics. An introduction. 5th edition. Springer, Heidelberg a. a. 2011, ISBN 978-3-642-22150-7 , p. 143.

[2] See Heine / Herr 2013, p. 40; Natrop 2012, p. 80 ff .; Schumann / Meyer / Ströbele 2011, p. 65 f .; contrary to Wied-Nebbeling / Schott 2007, p. 48 f., who interpret superior goods as synonymous with the common definition of normal goods.