As incomes rise so does the demand for products that are considered "normal goods". It is a relative term. It represents a movement away from a good considered "inferior" to it. An example might be hamburger and steak. As incomes rise people, when it comes to choice of meats, people consume more steak (better quality and more expensive) than hamburger. However, what is one persons inferior good might be anothers normal good. Example: As incomes rise, someone might move from Spam ("Inferior") to hamburger ("normal"). It represents a vertical move up the quality of food food-chain. The article below discusses beef as an emerging normal good in Africa without using the actual term, but is playing out as we speak. This is a GOOD thing. See graph to the left. With rising incomes people are willing and able to pay more for beef prepared with more advanced methods. Even within the category or beef, people are choosing choosing to move away from an "inferior" method of buying it (open-air markets) to a "normal" method (prepackaged in formal storefronts)....
WSJ: Catering to New Tastes as Incomes Climb (HT: MV=PQ)
""Around 10 million Nigerians moved into the middle-income bracket, meaning they could buy more than just necessities, in the past five years, according to an estimate by London-based private-equity firm Actis LLP. Nigeria's estimated $9 billion market for red-meat products is the continent's second biggest, after South Africa, according to a recent study sponsored by the British government....
Zambeef expects that as the middle class in this country of some 150 million people grows, so, too, will the number of people shopping in Western-style stores. The company hopes to lure customers used to buying meat in open-air markets by offering clean, packaged products while charging only slightly more than the markets. While a pound of beef might cost around $4.10 at a Lagos open-air market, Zambeef might charge about $4.75....""
No comments:
Post a Comment