On the Interpretation of Inferior Goods and Factors

The jargon of economics defines the concept of inferiority in terms of market behaviour: purchases of an good (factor) are inversely related to income (output). The literature contains few instances of systematic interest in the attributes of commodities that display such market behaviour,1 most writers being content with the interpretations of inferiority in Hicks' Value and Capital. These interpretations are the points of departure for the following discussion. After reviewing Hicks' concept of an good, I suggest that goods that display negative income elasticities are not necessarily goods of quality. The discussion then switches to Hicks' interpretation of the factor as one specially suited to small-scale production. I propose a revised and more general interpretation of this case. Returning to consumer theory, analogies with the factor are used to suggest the nature of inferior consumer goods which are not goods of quality

Capital (architecture) · Capital good · Economics · Epistemology · Interpretation (philosophy) · Jargon · Linguistics · Microeconomics · Positive economics · Production (economics) · Public good · Quality (philosophy) · Value (mathematics) · Computer Science · Economic Theory and Institutions · Philosophy

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