Ordinary good

An ordinary good is a microeconomic concept used in consumer theory. It is defined as a good which creates increased demand when the price for the good drops or conversely decreased demand if the price for the good increases, ceteris paribus. It is the opposite of a Giffen good.

Since the existence of Giffen goods outside the realm of economic theory is still contested, the pairing of Giffen goods with ordinary goods has gotten less traction in economics textbooks than the pairing normal good/inferior good used to distinguish responses to income changes. The usage of "ordinary good" is still useful since it allows a simple representation of price and income changes. A normal good is always ordinary, while an ordinary good can be normal, inferior or sticky.

Distinction between income and price effects

Income change				Price change
	Normal good	Inferior good			Ordinary good	Giffen good
Income up	Consumption up	Consumption down		Price up	Consumption down	Consumption up
Income down	Consumption down	Consumption up		Price down	Consumption up	Consumption down

See also

• Supply and demand
• Consumer theory
• Giffen good
• Inferior good
• Normal good
• Capital good

References

• Hal Varian, Intermediate Microeconomics: A Modern Approach, Sixth Edition, chapter 6