Question

We are currently in the midst of a global pandemic. Are there any goods or services that may switch from “normal” to “inferior” or vice versa during this health crisis? Do you think any such changes will be permanent?

* not services like health insurance or park admissions perferbably some goods

Answer 1

                                    The global economy is affected today with the trouble caused by the Covid-19 pandemic and it has imposed various changes in the functioning of economies all over the globe. With the lockdown measures that have been imposed in most of the states, the transportation has been stalled at many places including international transports which have resulted in lower exchange of goods and services on a global scale both in international economics and domestic economics. The wages have fallen and there have been much job losses which have affected the purchasing power of various consumers in the market. Most of the shops have been closed and only essential services and goods are being circulated in many places which have forced the consumers to follow a different consumption pattern today. The above cases have caused the rise of inferior goods in the market which are goods whose consumption would reduce with lower income for the consumers. The following are some categories of goods that have witnessed a change in consumption from ‘normal’ to ‘inferior’ status over these times and the reasons for the same

· The consumption of fast foods has declined over the time as it has become unavailable to the consumers in many areas and also the consumers have become less capable of buying such products due to huge job losses and decreased income patterns in the economy

· The closure of multiplexes, malls etc have led to the lower consumption of luxury goods like costly clothing and accessories on a global scale.

· The automobile sector has seen a decline in the purchase of luxury vehicles however, the purchase of low-cost vehicles has been raised since most of the people who were dependent on public vehicles have started to use private vehicles.

· Most of the functions like marriages, parties etc have been barred which has caused a reduction in the consumption of items like gold jewellery, beverages etc

· The major impact has been on the international tourism sector and thus there has been a rampant decline in the purchase of local products on an international scale

· The purchase of items like travel bags and related accessories has also declined during these times

· When it comes to services, the tourism sector is the one that has been affected the most and many business patterns that have been linked to the service has been stalled due to the restrictions on both international and domestic tourism

                                      From the above facts, it is clear that the spread of the pandemic has caused a fall in the consumption of many products and has redefined the consumption behaviour in many economies. The consumption of essential and health-oriented goods has increased and other non-essential goods have been decreased over the times. Thus, we can see that a slow transition is being made in the global consumption pattern over these times.