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Classification of a good as inferior in economics is not a judgment about that particular good, it's just a historical observation about a particular income-dem
by tdeck 5y ago
Classification of a good as inferior in economics is not a judgment about that particular good, it's just a historical observation about a particular income-demand curve. Let's just quote the Wikipedia article:
> 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 fulfill their purpose, but as more costly substitutes that offer more pleasure (or at least variety) become available, the use of the inferior goods diminishes. Direct relations can thus be drawn from inferior goods to socio-economic class. Those with constricted incomes tend to prefer inferior goods for the reason of the aforementioned observable inferiority.
Many of these goods are eschewed by the rich due to cultural / status phenomena that are constructed artificially by people trying to sell so-called luxury goods.
In the context of how to plan our cities, this has little bearing on the discussion. Should we use mechanical clocks to keep time because when people get rich they're more likely to buy watches with mechanical movements? Certainly those have emerged as a status symbol, but that's entirely constructed and could be otherwise. It's not based on any inherent superiority.
- rufus_foreman 5y ago>> In the context of how to plan our cities, this has little bearing on the discussion. I'm not sure where you get that. If public transportation is an inferior good, then to the extent we need people planning our cities those planners need to take into account that the demand for public transportation will decrease as people get wealthier. Rich people don't ride the bus. Maybe that's OK?
- tdeck 5y agoYou're confusing absolute and relative wealth. Sure, wealthier people in a particular metro area may be less likely to take transit than less wealthy people in that metro area. Plenty of wealthy people move to dense urban areas from car dependent suburbs and then stop driving as much. > Rich people don't ride the bus. Maybe that's OK? It's not practical to have a dense urban environment where everyone drives everywhere, because cars and car infrastructure take up an incredible amount of physical space. So if people want to live in those areas (and clearly many people do - they're willing to pay a premium for it), then a good percentage of people in those areas need to walk, bike, or take mass transit. If they don't, the city will shut down due to gridlock and nobody will get anywhere.
- rufus_foreman 5y ago>> Plenty of wealthy people move to dense urban areas from car dependent suburbs and then stop driving as much. And when they move there, the wealthier they are, the less likelier they are to use public transportation. Because public transportation is an inferior good. >> (and clearly many people do - they're willing to pay a premium for it) Not true, high density housing costs more per square foot than single family detached and sells at a discount to it. People are willing to pay a premium for single family detached housing.
- tdeck 5y agoYou're being deliberately obtuse. People are willing to pay a premium for more space in the same dense metro area. Why are there condos worth $2MM in SF when you can buy a house in central PA for $40,000? It's because people want to live in dense urban areas with other people. Those dense urban areas are simply not workable with everyone driving everywhere. It wouldn't matter if everyone's a billionaire, you can't have a dense urban core with everyone driving. Those dense urban areas are the most expensive real estate markets in the country.
- rufus_foreman 5y agoWhich goes for more, the condo in SF or the single detached home in SF?