Definition : Inverse income elasticity

Inverse income elasticity refers to the relationship between a change in income and the corresponding change in demand for a particular good or service. It is a measure of how sensitive consumers are to changes in their income, with a negative value indicating that as income increases, demand for the good or service decreases. In other words, as people become wealthier, they are less likely to purchase the good or service. This concept is important in understanding consumer behavior and market trends, as it can help businesses determine the impact of changes in income on their products or services.

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