Are Children an Inferior Good?
June 22, 2011 in Daily Bulletin
Economist’s make a distinction between normal goods and inferior goods. Normal goods are the type that you buy more of as you get richer (such as four course meals at the Ritz Carlton) and inferior goods are those that you buy less of as your income increases (think Ramen noodles). So, are kids normal goods or inferior goods? As people get richer do they choose to have more or fewer kids?
Freakonomics concludes that no matter how you look at it, whether by country, or by history, and controlling for factors such as the advent of contraceptives; it is clear that children are an inferior good. You can read their analysis over here.
Source: Freakonomics
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