Income elasticity of different consumer goods, Managerial Economics

Income Elasticity of different consumer goods

Commodities	Coefficient of income elasticity	Impact on expenditure
Necessities	Less than unitary (e_y< 1)	Less than proportionate change in income
Comforts	Almost equal to unity (e_y = 1 )	Almost proportionate change in income
Luxuries	Greater than unity (e_y> 1) M	More than proportionate increase in income

Second, the concept of income elasticity could also be used to describe the 'inferior' and 'regular' goods. The goods whose income elasticity is positive for all levels of income are known as 'regular goods'. Instead, the goods for that income elasticity is negative, further than a specific level of income, are called as 'inferior goods'.

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