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Income elasticity of demand
In economics, the income elasticity of demand measures the responsiveness of the quantity demanded of a good to the income of the people demanding the good.
It is measured as the percentage change in demand that occurs in response to a percentage change in income. For example, if, in reponse to a 10% increase in income, the quantity of a good demanded increased by 20%, the price elasticity of demand would be 20%/10% = 2.
For sober goods it is negative: with a rise of income one changes to more luxury alternatives.
See also:
| List of Marketing Topics | List of Management Topics |
| List of Economics Topics | List of Accounting Topics |
| List of Finance Topics | List of Economists |
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