The upside of income elasticity

While, as I discussed earlier, some product markets such as champagne are struggling in the wake of the current economic downturn, others seem to be holding up well. Melbourne newspaper The Age reports that local book retailers are faring better this Christmas than last.

So the income elasticity seems to be helping out here. Possibly books are inferior goods (i.e. sales go up as income drops). It is more likely that what we are seeing is consumers, conscious that their incomes are not rising or a little more uncertain, switching from more frivilous leisure goods (including champagne and travel) to more time-heavy commitments such as reading.

What other products might be experiencing such boosts in sales?


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2 Responses to “The upside of income elasticity”

  1. Steve Sammartino Says:

    In the past two weeks we’ve noticed that has picked up, in fact doubled the amount of daily rentals on items people might have been previously buying, such as Nintendo Wiis’ and other leisure based items.

    So, if this trend continues I’ll be loving the downturn.

    PS – Sorry for the plug… couldn’t help myself 🙂

  2. Andre Sammartino Says:

    Self-promotion is justified in this instance Steve. A less surprising candidate is Spam (the food not the inbox annoyance):

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