Sep 23 2010

Is bicycle transportation an “inferior good”?

This article was originally published on May 12, 2008. It is being re-published since it relates to our current units in AP and IB Economics.

The Associated Press: Gas prices knock bicycle sales, repairs into higher gear

Greg Mankiw has an ongoing series of posts linking to articles illustrating the impact that rising gas prices have had on demand in markets other than that of the automobile.

One of the determinants of demand for goods and services is the price of related goods and services. As gas prices rise, drivers tend to switch from automobiles to alternative forms of transportation. A few days ago I blogged about the switch from tractors to camels in India, one illustration of the relationship between the price of one good and demand for its substitutes. Mankiw has so far linked to articles about the impact of high gas prices on demand for bicycles, small cars and mass transit.

These three “goods” are all substitutes for the most common form of transport among Americans, the private automobile (often times a gas-guzzler in “the bigger the better” America). When the price of a good like personal vehicular transport increases (in this case due to the price of an input required in private cars, gasoline), the demand for a substitute good will increase.

In the case of bicycles, evidence indicates that just such a change in demand is already underway in America today:

Bicycle shops across the country are reporting strong sales so far this year, and more people are bringing in bikes that have been idled for years, he said.

“People are riding bicycles a lot more often, and it’s due to a mixture of things but escalating gas prices is one of them,” said Bill Nesper, spokesman for the Washington. D.C.-based League of American Bicyclists.

“We’re seeing a spike in the number of calls we’re getting from people wanting tips on bicycle commuting,” he said.

Interestingly, the increase in demand for bicycle travel in response to high gas prices might be even more pronounced due to America’s sluggish growth, 4% inflation and rising unemployment. Real wages have seen little gain in the last couple of years as growth has fallen close to zero while prices have continued to rise. It may be possible that a fall in real incomes in America has spurred new demand for bicycle transportation, which could be considered an inferior good, meaning that as household incomes fall, consumers demand more bicycles for transportation.

Since bicycles represent such a drastically cheaper method of transportation, high gas and food prices, a weak dollar, and falling real wages accompanying the economic slowdown have had a negative income effect on American consumers, leading to increases in demand for inferior goods such as bicycle transportation

That said, having worked in a bike shop myself for two years in college, I can say that most consumers looking at new bicycles are not doing so because of falling incomes. Quite the opposite, in fact, indicating that new bicycles are normal goods (those for which as income rises, demand rises). However, the article states that in addition to increases in new sales, “more people are bringing in bikes that have been idled for years”.

It may be that while new bicycles themselves are normal goods, bicycle transportation as a whole is an inferior good. The increase in demand for new bicycles could be explained by the substitution effect (as the price of motor vehicle transportation rises, its substitute, bicycle transport, becomes more attractive to consumers) and at the same time explained by the income effect too (as real incomes have fallen, demand for the bicycle transport has risen).

This phenomenon is an excellent illustration of how the income and substitution effects work in conjunction to explain the inverse relationship between price and quantity demanded for automobiles (the law of demand), as well as the concept of cross-price elasticity of demand between two substitute goods.

Discussion Questions:

  1. Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?
  2. What is the definition of an “inferior good” in economics?Do you believe bicycle transportation is an “inferior good”?
  3. Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?

81 responses so far

81 Responses to “Is bicycle transportation an “inferior good”?”

  1. Dave Atkinson 13 May 2008 at 12:57 am

    It seems to me the relationship between bike commuting and auto commuting must be more complex. I'd agree bikes and bike commuting are different goods–and dependent in some way; e.g. you cannot shift from auto to bike transportation if you don't already own a bike. Also "bike commuting" runs a very wide range of income levels…many people bike commute because they cannot afford to own a car. Others, like me, are fanatics who ride a fixed gear bike 25 miles round trip from the suburbs into Boston wearing lycra and spandex.

    You also need to consider how availability of other modes of transit factors in…I can choose to drive and park ($11 to park, approximately $8 gas), or walk 3/4 mile to a $10.50 train ride, or drive to a $3 lot and $10 train, or bike to a $10 train. Additionally, there are the costs of frustration and aggravation with driving, frustration and delay (train), extreme aggravation at missing train, crisis of not being able to get home from work quickly (train), and delay/aggravation of flat tire or bike crash.

    Few of these costs are as predictable as gas and parking; e.g. weather unpredictability and inconvenience also plays a role. So for me, the choice of bike, train or car is complicated, but usually boils down to an issue of time and schedule + weather, more than gas cost. But I am an edge case! It would be interesting to see if an economic model could sort out the "noise" in all that to make any generalizations. Most people don't have as many options as I do, so I think in some cases the increasing gas costs could be isolated and perhaps would tip some people into investigating alternatives.

  2. Chris Smithon 13 May 2008 at 12:51 pm

    … and if you use a unicycle instead of a bicycle then you only use half the energy … true?

    .. here is me on world tour … on my unicycle at Eiffel Tower .. cycling must be good for ???

    http://tinyurl.com/4xt4le

  3. Adamon 14 May 2008 at 10:34 pm

    First, thanks for taking on this topic. It is one that is near and dear to my heart, lungs, and legs.

    Up until mid way through last year I commuted 33k each way back and forth from work. I have a car and live in Japan so public transport is also readily available. If you are going to do this kind of distance you need a decent bicycle but that doesn't mean going ape with the latest and greatest in carbon fiber. I have a good bike with components and wheels that are on the bottom end of higher quality stuff. (Scott Aluminum Frame, Carbon Fork, Shimano 105 Components for the cyclists out there) I paid roughly 2,000 USD for it originally and in the first year I put about 300 USD into it in maintenance but it seemed to find a groove after a while where everything just worked and worked well for 5000 plus km before any noteworthy maintenance was necessary.

    Economically I approached the project (and my wife) with the argument that the train was roughly 9USD per day which I rounded conveniently up to 10USD so I could look at 250 days and a free bicycle. That passed the wife test and I am pretty confident it worked out to my advantage financially.

    We also have a car and the tolls, gas and parking per day are pretty good when you want to justify a fairly pricey bike. Parking is 10US per day, tolls 8USD per day, and gas somewhere around 8USD per day again Japan so all the whining in North America is laughable. We have been paying these prices for years. Call the auto commute 25 dollars per day and even a decent road bike is looking like a couple of months of commuting and it was free.

    I agree that a good bicycle is a "normal good" most of the time because not many people are going to really commit to a bicycle commute. That said, assuming the gas prices stay where they are, I expect we may see more people making the commitment and actually using the bicycle to their financial advantage.

    One thing not to be overlooked is that energy costs no matter whether it comes from engines or your legs. I use a heart rate monitor most of the time. One piece of useful information these provide is how many calories you burn during a ride. Cycling is one of the most efficient methods for converting human energy to personal speed and you can burn up some serious fuel on a fast and furious ride that your body becomes completely conditioned to executing 2x daily.

    I would average 29 kph, and arrive to work in just under an hour. In the process I would burn 1,000 Calories on the way in and 1,000 Calories on the way home. Now being in education, I had access to showers and a buffet lunch meal plan which I exploited to the maximum. Had I not I would have eaten so much at home that my wife might have started to add that to the total expense of this lifestyle throwing off my solid financial reasoning.

    I really enjoyed the idea presented in this blog about cycles as an normal good in comparison to an inferior good. I would offer it depends on how the person uses it. In my case, I am certain the bike saved us money so in that case inferior it is.

    Further complicating things though, my resting heart rate is still down below 50 and my body mass index has increased only 3% in the 20 years since I was sixteen so I think that will keep me out of the hospital more than others as we age and die. Maybe I won't be a financial burden on society in my old age but…I was hit twice and whether due to experience (cycling for years) or luck (lucky for years) I wasn't hurt badly enough for even so much as a band aid. Without a trace of ego as I say this, I think the statistics would change if everybody was out there spinning pedals.

    I choose to ride with buses, taxis, scooter, motorcycles and cars over the sidewalk because of their relative predictabilty compared to the average person walking down the street not to mention riding a two wheeled object that has "been idle for years." The very thought of everyone on bikes makes me want to take up driving.

  4. […] sobre este mismo punto, el incremento de la demanda de bicicletas, Jason Welker se pregunta si el transporte en bicicleta es un bien inferior. Welker sostiene que la subida del […]

  5. Nicholas Burnhamon 17 Nov 2008 at 6:37 am

    There are many ways you could think about this. In places like china people need bicycles because they are cheap and efficient and can fit most places cars cant. Here in Switzerland, its more likely that people ride bikes as a hobby or to keep fit. For the Chinese it may be an inferior good but here in Switzerland there are few perfect substitutes, so it probably isn't. As with every economic issue, its all relative, and there probably never will be enough data to prove either side of an argument completely.

    Imagine if the global economy boomed. Then, i wager, people could find and afford substitutes for each quality that the bike is needed for. For exercise, people could get fitness machines and things. Fresh air and scenery you can get from open top car rides. Not great examples, but do you get my point? The market for bikes will eventually become flexible. I therefore might argue that bicycles are an inferior good.

  6. Maren Rackebrandton 17 Nov 2008 at 8:01 am

    I also think, like Nic, that it always depends on the country if the good is an inferior or a normal good and if people will buy more or less of it if their incomes rises or falls.

    I personally can not imagine that Americans will buy more bikes and drive around with it. When I lived in the States for a year I basically never saw anybody riding the bike, because the ways are so long and the people go everywhere by car. During my last months there the gasoline prices started to rise a lot, but still the people went to get gasoline and drive around even thoug they were mad. I do not think most of them even thought about going somewhere by bike. So it's hard for me to imagine that the Americans will really buy more bikes and drive around with them, because the ways are usually just too long.

    On the other hand if gasoline prices went up by a huge amount in Germany, in this case I would definitely see that more people would go by bike or by a different transportation. Compared to the States, Europe has a better transportation system and especially in bigger cities you can go from one place to another without a car. So because the distances are usually not that far in for example Germany, the people would find a different way to get somewhere without using their car.

  7. Bastien Vogton 17 Nov 2008 at 10:08 pm

    This is a very interesting dilemma, i agree with Nick that in some places bicycles are used by all classes and not only by "peasants". In the world today environment plays a big roll in the classification of a bicycle being an inferior good or normal good. In countries like America where people travel nearly only by car, a bicycle is an inferior good, meaning that when income decreases consumers will resort to this good, but in a small town in Italy, where the roads are too narrow to drive even smart car, a bicycle is a normal good. It appeals to consumers even with high income. So if the price of petrol goes up it will have an effect on the bicycles that are sold as inferior goods in some countries, an not where all classes with all incomes ride bicycles.

    Nevertheless, a bicycle is not the only substitute for a car. There is public transport or walking etc. but again these alternatives are not available everywhere in the world.

  8. Helene Gleitzon 18 Nov 2008 at 1:21 am

    As Nic and Maren stated in their own posts, it does depend on the location. For example, Europe and Switzerland are pretty big on saving gas, and being "green" overall. Therefore using a bike to commute to work is a rather normal thing. I do not think that if incomes rise in Switzerland, people will stop buying bikes, however most people do own a car anyway.

    In the United States though, most people travel by car because it is convenient and it would be hard to travel by bike on such long distances… But I do think that bikes would be very helpful in cities such as New York, or L.A.

    I will admit though, that in China, bikes are inferior goods, since most people try to buy a car as soon as they have a high enough income to afford one.

    In Europe, most people own a bike, either to commute to work or just for leisure. Therefore I do not think that people think of bikes as inferior goods, but rather as a normal good used for both leisure and transportation. In the United States , bikes are thought of being inferior goods, since they cannot get you very far and most people would rather buy a car than a bike.

    Due to the rise of prices for gas, more and more people start to buy substitutes of cars, yet they are still not as popular in the United States as they are in Europe.

  9. Guillaume Duboison 18 Nov 2008 at 2:01 am

    I believe that this is a fairly interesting topic, especially when taken into account the country from which I come, Belgium.

    In Belgium, (and I speak for the majority of the population) people live not more than 20 minutes away from work – by foot. For these people, biking is not simply a "green" way of living, however it has become almost a complete replacement for automobiles in the smaller towns. Of course, cars are used and owned, but no matter your income, Belgians usually if not always will take the bicycle to their local necessities such as supermarket, school, and more. Furthermore, the total length of all traffic jams in Belgium has an average of 355 kilometers every day, and that is a very large amount when we take into account the density of highways in Belgium, which is the highest in any European country.

    For Belgians, bicycles are not inferior or superior goods as they are in most other countries. In Belgium, they are rather necessities of the people. If incomes or prices rise, people will still buy bicycles, and perhaps simply those of better quality.

  10. Amit Zaidenbergon 18 Nov 2008 at 5:11 am

    I believe bicycle transportation in general is an inferior good. If possible most people would rather use a car, bus, or train. Although a luxury to walking the general population can afford a bicycle transportation. However, many people use bicycles for other things other than plain transportation like sightseeing or exercise. To these they are often luxury goods. Because more sights can e seen with a bike rather than walking and more places can be gotten to with a small bike rather than a car. Because of this rental bikes in places where tourism is common is a much higher rate than other places and for exercise many people like biking and use it as a way to stay in shape

  11. Aleya Thakur-Weigoldon 19 Nov 2008 at 1:42 am

    I also think that it depends on where you are in the world in order to determine whether or not bicycles are inferior goods or normal goods. In for example the United States most people drive cars because the distances are very long and the roads are also big enough for many cars. But in other countries like Italy or Spain there are many places where bikes are just more practical than cars because the roads are smaller . I think that bicycles are neither an inferior good nor a normal good because there are many factors that influence it.

  12. Christian Clausenon 18 Nov 2008 at 10:47 pm

    I wouldn't say that a bike is an inferior good everywhere in the world, for instance if you live in a big city, not only do you travel cheap, but also quicker during rush hour. And when the price of oil suddenly rises and then goes back down again, you realize how fit you sudden is and you keep riding your bike!

  13. Ross Hutchisonon 19 Nov 2008 at 1:34 am

    It seems fairly well argued that bicycle transportation stands as an ambiguous case in reference to its status as an "inferior good". However, I think, in most cases at least, we will not see the bicycle being consumed in a manner that would equate it to being an inferior good. Cars are indeed more desirable on the basis of long term travel. However, in small and close-knit areas, the bicycle will always be a more personal and social form of transport. The majority of the world, at least the world we come into contact with on a regular basis (we refers to ZIS students) is that of the first category. Cars are more desirable insofar as they provide more efficient and quicker transportation. As car sales fall, it does not follow that people would require a bike for a number of reasons. In a great number of areas, the bicycle can not be used as a viable substitute for real transportation: it travels at a much lower speed and requires personal energy consumption. . Also, in today's society (in regard to urban life), the personal and social reason for being a bike is less and less likely. The question has some serious philosophical element as well as a purely economic one.

    In addition, the bike that was quoted itself admits that they do not know if the current economic situation is the cause. They report getting more calls regarding bicycle transportation but they do not speak if this is inquiry borne of people's nature to look for easier and cheaper alternatives (they would not, in most cases, find that in bicycles). We can therefore not put increased sales (in which a direct figures is not provided) down to pure inferior good status.

  14. Dominic McNameeon 19 Nov 2008 at 2:45 am

    I think in most first world countries bike riding is still a normal good. This is because most families could afford to own a car if they chose to. However they chose to save money by riding a bike instead. The bike riding stays as a normal good because it was a choice to ride the bike, they could still drive if they were willing to give up other luxuries.

    However, for the very low class in the developed world and in the developing countries bikes would be an inferior good as they are the only mode of efficient transport that many people could afford. Since they don't have the choice to drive a car then bike riding is an inferior good.

    I do not believe that those who are bringing in their bikes for the first time in years are forced to not use their car due to the expenses, simply that they do not feel the need to buy a brand new bike.

  15. Theresa Mehlon 19 Nov 2008 at 2:55 am

    It is reasonable that the transportation with the bisicles you already have at home and the replacement center for these old bikes is inferior and I can understand how new bikes are seen as normal goods. Still a news article I found on "Fox Business" states that electricbike sales have doubled due to the rising gas prices. A woman states that she wants to "spend less money on gas". She is therefor taking a substitute to the car driving. Most people already have a normal bike at home. But an electric bike is an even better substitute to the car than the normal bike at home since it is quicker and less exausting. The electric price sales have also gone up due to the awareness of people to global warming, the article suggest.

    This is therefor another good example of an inferior good which you buy more of when your income goes down!

    (http://www.foxbusiness.com/story/markets/electric-bike-sales-rev-amid-high-fuel-prices/)

  16. jabbobbon 19 Nov 2008 at 4:26 am

    I like the idea that something might have opened America's eyes in regard to global warming. Maybe one of Al Gore's campaigns about climate crises had some influence on Americans. Maybe some people actually learned that cars are destroying our world and bicycles don't. I think global warming, which also is a current issue, should be taken into consideration besides all the determinants of demand, which almost everybody has already talked about.

  17. Rohan Ron 20 Nov 2008 at 3:19 am

    I agree with most of everyone's points because it does depend on where you live because in India, everyone wants a car even when they know traffic is a big problem, people who have bicycles in india are usually the people who cannot afford cars, but if only it was a normal good, then pollution, global warming and many more problems could be solved. If the price of oil were to drastically drop then we would still have problems in the long run.

  18. celineon 20 Nov 2008 at 4:34 am

    I do believe that a bycicle is an inferior good. As we see in the developed countries, car are the main means of transportation. This is because if is way more efficent than the bycicle in long journeies, and because the people can afford it.

    It is used in underdeveloped ir developing countries though, like India or Sout-East-Asia where the people can not afford to be driving. Therefore this is one of the only ways to get around.

    As the incomes of the Indian people increase, they will also shift out of bycicles and into cars. Hence it would be discribed as an inferior good.

  19. Magdalenaon 20 Nov 2008 at 4:51 am

    The demand for bicycles has increased due to that the media keep posting facts about the global warming and how we as consumers can make a change. I would also say that the demand will increase since the gas price increases and it is much cheaper to have a bicycle than a car, however, because of that bicycles are inferior goods the market for them will never over take the market for cars or the demand for cars.

    Considering that in some countries the consumers are not able to ride the bicycle as an alternative to the car, because of the climate for where they live. (Sweden for example, using the bike instead of the car during the winters is not really considered an option.)

  20. Sabrina Walshon 20 Nov 2008 at 7:12 pm

    This is an incredible example of income and substitution working in condition. It would have never fazed me that bicycles and automobiles were so closely related. The cross price elasticity of bicycles and automobiles would be nice to compare.

    However unfortunate to say, I truly doubt that the purchasing and tuning up of bikes has very much to do with the environment yet. The American public is more influenced by their pockets rather than concerns about global warming. That is not to say there aren’t some in the public who felt the need to purchase bikes due to influences from the media. This is just an outside variable that is playing along with the price changes. Due to this outside factor, global warming concerns, the comparison cannot be 100% claimed as valid, but it poses a good thought. That the American public is making the automobile industry more elastic by finding and consuming more substitutes

  21. Matteoon 21 Nov 2008 at 4:28 pm

    There is a different approach to the matter posed, depending on whether consumers live in western countries or in developing countries like China or India.

    In western countries, with high gas and fuel prices and economies hit by the financial crisis, rising inflation and falling of real wages, bicycle is a good subsitute of cars to commute to work:no fuel consumption, no traffic jams, opportunity of an healthier life style. In Zuerich area at least also a small motorbike like Vespa is a good subsitute, though it is not as cheap and environmental friendly as a bicycle is. A bike it is not an inferior good and is a good alternative when commuting very close to the place we live or just for leasure. In Switzerland at least, where car drivers are very often recommended to switch off engines when stopping at traffic lights, bicycle is certainly not an inferior good. Swiss people is very focused on environmental issues and keen on conducting an healthy life style, and bikes may offer a good opportunity for an half on hour of exercise.

    In developing countries bike is simply a necessity: all substitutes are not as cheap as bike is. Millions of chinese and indians cannot afford to buy a good subsitute, a car or a motorbike.

  22. Horia Stanescuon 21 Nov 2008 at 5:47 pm

    Regarding bicycles as an inferior good is justifiable, but to what extent? For example, in China, bicycles are the norm for private transportation or commuting. Every road is built to accomodate bicycles and there are numerous traffic-lights aimed specifically at better organizing bicycle trafic alone. However, is it justifiable to say that all these commuters would, real-income allowing, switch to an automobile as the preferred form of transportation? Even in the western world, in largely developed cities, many opt to use bicycles not only because of their massively inferior upkeep cost, but because of ease of transportation and finding parking spots.

    Bicycles are a strange good in that there are so many external factors that it is impossible to conjure one rule that would be applicable to all bicycles in the whole world. Another such example of differentiation is due to weather: a person with a lower-real income in Alaska would keep their car for a longer period of time than a person with a higher-income in California would switch to a bicycle as their form of transportation.

  23. Sean Isaacson 21 Nov 2008 at 10:04 pm

    I do not believe that bicycles should be considered inferior goods; even in this case, I believe that they are behaving as substitute goods rather than giffen goods. Although it seems that people might be purchasing bicycles because they are giffen goods, instead, they are purchasing more bicycles do to increasing costs of maintenance of alternative goods (cars, motorbikes etc.) As gas prices become more expensive, the use of cars does too, and as is evident in the article above, bicycle sales have increased. This supports the idea that bicycles are substitute goods. Additionally, if middle and upper income households are also purchasing more bicycles (which I assume is likely the case), it refutes the idea that they may be inferior goods.

  24. Maddi Diamondon 21 Nov 2008 at 10:08 pm

    Horia is very right in saying that there is no real way to determine the nautre of a nation's shift from automobile to bicycle transport.

    Having lived in Holland for 6 years, i was accustomed to seeing quite a substancial amount of bicycle riders, bicycle sheds, whoel families going places together with bags on their backs, using only bicycles.

    It was not only the cheaper cost of choosing bicycle travel over gas-fueled engines, but also the fact that there are some places in holland where cars may find it very difficult to maneuver. This is the case in many countries, this is why for example in Greece and Italy, a large percentage of the population drive scooters instead of cars.

  25. Daniel Edmondson 24 Nov 2008 at 12:30 am

    There is no general answer to this question. As some of you have mentioned that bicycles are inferior goods is dependent on many factors such as country, culture and maybe gas prices. I would also add additional factors such as age and health of owner and whether it is fashionable to ride a bike. If people can afford a car and the infrastructure for a car is given I would assume they would generally choose a car rather than a bike making it an inferior good. In the posted article Nesper mentions that people are biking a lot more but is only hypothetical about the reasons. He does not mention a study done to find the correlation between gas prices etc and sales of bikes. Having written all this I realize that in my circle of friends bikes are normal goods and certainly no necessities.

  26. Simon Strongon 26 Nov 2008 at 4:04 am

    I would say that generally bicycles are inferior goods purely because for most people cars are more convenient and when they can afford to buy them then they will. Understanding that in cities many people choose bikes because of being faster at rush hour, generally less hassle i.e. parking, congestion charges (e.g. London), a way to keep fit they would not be seen as inferior. But of all the people inside of cities that can afford cars I wonder what the percentage that have bikes and cars would be. The article kind of indirectly points out that bicycles are inferior when it says “People are riding bicycles a lot more often, and it’s due to a mixture of things but escalating gas prices is one of them,”. Basically the quote is saying it's become too expensive for people to drive cars. Due to the higher gas prices it feels as if consumers have less incomes because they are paying more for their petrol. Due to this they feel they do not want/need to use a car and so move back down to a bike. Since the oil price has dropped to around $50 a barrel it would be interesting to see how many of these individuals have switched back to driving their car now that they feel they can afford and justify spending their wages on petrol for their more convenient cars.

  27. Bjorn Borgerson 26 Nov 2008 at 5:23 am

    Personally, I am quite a fanatic biker, and I have invested quite some money in my bikes… Today some of the most expensive mountain bikes will leave you 10'000 Sfr.- poorer than you were previously. Quite honestly, those prices are nearly unjustifiable, since you can nearly buy a small car for that money, yet I feel that it portrays the fact that bicycles are normal goods well. Though the two markets (the market for leisure/sports bikes and the market buying bikes for the reason that you cannot afford a car) are quite different, at a level of a sustainable income bikes usually are a normal good… the more you earn, the more expensive of a bike you will buy.

  28. Markuson 19 Dec 2008 at 6:46 am

    It is difficult to say whether bicycles are an inferior good. They are in most cases less desireable than cars. I do not think they can be considered direct substitutes to cars, since bicycles are much slower and are often used for shorter distances. There are different forms of bicycles, i would say in countries where bicylces are the main form of tranportation and cars are much rarer, i would say bicycles are an inferior good. However sometimes, as Bjorn mentioned bicycles can most definately be a normal good. It is hard to put all bikes in one category.

  29. Amiton 25 Sep 2009 at 5:38 am

    I believe bicycle transportation in general is an inferior good. If possible most people would rather use a car, bus, or train. Although a luxury to walking the general population can afford a bicycle transportation. However, many people use bicycles for other things other than plain transportation like sightseeing or exercise. To these they are often luxury goods. Because more sights can e seen with a bike rather than walking and more places can be gotten to with a small bike rather than a car. Because of this rental bikes in places where tourism is common is a much higher rate than other places and for exercise many people like biking and use it as a way to stay in shape.

  30. Gavin Steinhublon 25 Sep 2009 at 7:11 am

    I agree fully with Amit. Because for a majority of people the demand for car, bus, or train transportation is higher, it would be an inferior good. Even though transportation is a very elastic good, i believe as incomes rise so will the demand for cars, trains, and buses. The gas prices become less of an issue as your incomes rise, as does the price of cars themselves, so if income rises than the demand for those no work required transportation mediums also rises. Other than health nuts or tree huggers, no offense to anyone, most people would much rather take the easy way like cars, so unless your a tourist like amit said who is just sightseeing, most would much rather take the faster and easier mode, if their incomes allow one to do so

  31. Thomason 25 Sep 2009 at 3:56 pm

    The realationship between bicycles and automobiles cannot exist unless you are able to get to your destination on a bike. While bicycles are far more economic they rely on how fit or motivated the rider is and the majority of people will not buy a bike when they can spend 10 minutes in a car rather than an hour on a bike. If gas prices go up it will not caus people to stop buying cars infact more people will start to buy cars because they will see economic cars as a good investment.

  32. Johnon 25 Sep 2009 at 4:46 pm

    This is an interesting topic, because in my opinion bicycles can be both an inferior and normal good. In some countries bicycles are the primary mode of transportation because they are both cheap and efficient. In the United States however this is typically not the case. Bicycles are typically used for pleasure and enjoyment. During bad economic times Bicycles probably are selling better, because people who have a low income or loss of job would not want to pay high gas prices or pay to maintain a car. This would mean that the bicycle is an inferior good. Typically though in countries such as the US the bicycle is thought of as a normal good. As people make for money they purchase a nicer bike to use for fun and as a hobby. This would mean that as income rises people buy more exspensive bikes, this would cause the bicycle to be a normal good.

  33. Bjorn Borgerson 25 Sep 2009 at 8:44 pm

    Personally, I think the answer is very situation dependent. Bicycles, such as city bikes, that are a mode of transport can be seen as an inferior good. It serves a viable substitue to other common transport such as the car or public transport. As people earn less, they will consume more bicycles as it is only a small investment requireing few additional costs (unlike a car which needs gasoline, etc.).

    In the recreational bicycle industry however, as people earn more, they will be willing to invest more in their bicycle, and therefore bikes are normal goods. You can buy highend bikes ranging from 5000 to 15000 (!) Sfr.-, which clearly indicates that people are willing to buy more bicycles when their income rises.

  34. Janne J.on 27 Sep 2009 at 8:47 am

    I think bikes can be both inferior and normal goods depending on what the bike is being used for. If a bike is being used a substitute for a car, public transport or etc. then it is considered an inferior good, because as incomes drop more people will choose this cheap option to save money. However, when income rise again people will also invest more money in the bike industry, but this time the bikes will be used for leisure activities. For example, mountain bikes and racing bikes will now be purchased for free time activities, these good are then considered normal goods as they are not the cause of not having enough money. Instead a leisure bike is the result of having surplus.

  35. Nora Balbonion 27 Sep 2009 at 6:32 pm

    I had never thought about that bicycles could, to some extent, be considered inferior goods, because I had been focusing on the expensive race-bikes. These bikes that are primarily used for pleasure are definitely considered normal goods, because, just as any goods used for leisure activities, the demand will rise as the real income rises. Although a nation’s real income may actually not change as an effect of rising gas prices, people feel poorer when they pay more for the same amount of gas. This is why an increase in gas prices will, in most cases, have the same effects as a decrease in real income. When the demand for private automobiles decreases, seeing as they are complimentary goods to gasoline (price of gas increases, quantity demanded of cars decreases), people will look for alternative means of transport, one of these being the bicycle. I agree that functional bikes, used to commute to work/school are inferior goods, meaning that as real income decreases (because of higher gas prices) more bicycles are demanded. However, I think that unlike other inferior goods, such as low-quality clothes, their demand will decrease drastically when real incomes rise again. The other determinant of demand that explains the rise of demand of bicycles is that they are a substitution good to cars, as is public transportation. People will possibly start enjoying riding the bike as opposed to taking the car, so as an effect to a rise in gas prices, a change in tastes and preferences in favor of bicycles may happen.

  36. Drewon 27 Sep 2009 at 7:26 pm

    When I think about bicycles, I think of all of its uses: transportation, amusement or exercise. And when I think about possible substitutes to bicycles, I think of small cars, motor bikes, segways, micro scooters, rollerblades and skateboards. However when I look at this list, none can truly substitute all of its aspects. The motorized vehicles cannot match the exercise element. The other possible substitutes have the use of transportation, amusement and exercise. However they do not perform to the extent that bicycles do, especially in the exercise or transportation functions.

    Some people use bikes only for one of these three uses. Some use it for all three. But when it is used for transportation is where the economic relationship with cars can be drawn. If income falls or gas prices rise, then more people will use more of the transportation function of the bicycle because it is more economical. Some might go fix up their old bike for its transportation use, or go buy new gear such a helmets or biking gloves. Others will just simply use their bikes more frequently or for a brand new purpose. Only the people without a bicycle or not the appropriate kind will buy a new one. But also because of lower income, fewer people will buy bicycles for its amusement or exercise purposes. So as a result of lower income or an increase of gas prices, the purchasing of bicycles will not increase, but its usage will.

  37. Bjorn Kvaaleon 27 Sep 2009 at 8:18 pm

    Although I believe that bikes are a normal good (especially in the upper price range), I agree with Mr. Welker that bicycle transportation is an inferior good. Here in Switzerland, there are so many other substitutes to riding your bike from point A to point B. The public transportation sector is very well organized and very efficient. A lot of consumer demand has shifted from car transportation and switched to public transportation and bike transportation due to global warming (determinant of demand, tastes and preferences), oil prices (other related goods in consmption) and falling income. Also, many people have to travel long distances to get to where they want to go and therefore bike transportation is too much of an opportunity cost/time waster.

  38. Gelandoon 28 Sep 2009 at 4:06 am

    I believe that there are factors which cause bicycles to vary between normal goods and inferior goods. For example, recreational and competitive bicycles, such as BMX bikes and racing bikes, are normal goods because they appear more attractive to consumers with high incomes. Other more casual, street bikes are inferior goods because they are mainly used for travel rather than recreation. The bicycles that are showing an apparent rise in demand must be the street bike inferior goods. Other variants, such as your surroundings and job situation also have an impact on whether bikes can be classified as normal or inferior. For example in a city with an efficient public transport system and low gas prices, bicycles could be classified as inferior goods rather than normal goods. Overall, while bicycles themselves can be classified as inferior or normal goods, bicycle transportation itself is mainly an inferior good.

  39. kvoskuilon 28 Sep 2009 at 5:14 am

    I believe that bikes can both be inferior and normal goods. Bikes can be normal goods if they are for leisure, for example, a mountain bike can be a normal good because the consumers with high incomes can afford them. If the income of the consumers increases, the demand for the leisure mountain bikes also increases because they have become affordable. On the other hand, bikes can also be inferior; if the gas prices are high a consumer might decide to switch over to a more affordable transportation method, a bike. The demand for bikes will decreases as the income of consumers increases because they will be able to buy gas for their cars. Whether or not a bike is an inferior good also depends on its surroundings. In a city with bad transportation and high gas prices, a bike is defiantly an inferior good because they replace the high gas prices.

  40. Alexander Elyon 28 Sep 2009 at 6:31 am

    I believe that bicycle transportation is an inferior good because of its relatively low cost and need to exert effort. On the most part, people are going to get around by car, motorcycle or moped if they can afford it, because it is faster than a bike and requires virtually no physical exertion. Granted, environmental concerns and a desire for exercise certainly do drive people to ride their bikes, but that decision is often also influenced by cost. If someone's income goes down, they are less willing to pay for gas, insurance and car maintenance, which leads more and more people to select the bike as their mode of transportation. However, new bikes can be considered a normal good because in an economic downturn, people are more likely to seed out old bikes that may be in need of repair or to purchase used bikes. In times of prosperity more people would be willing and able to buy the more expensive new bikes.

  41. axelon 28 Sep 2009 at 6:50 am

    I believe in what Gelando says. The bikes with either be and inferior or normal good depending on what it is used for. If the wages rise and people buy more bikes then that woudl be a normal good. if people took their old bike or bought a new one instead of using the car then that would be a substituting good. the bikes woudl be an inferior good if it was used for transportation not recreation.

  42. Christa_bon 28 Sep 2009 at 8:46 pm

    Bikes as a good, to me, are normal goods. Bikes can be used for recreation instead of just transportation. But when bicycles are being compared to cars as a transportational method, they then become inferior goods. People have a higher demand for automobiles, and public transportation because it's quicker and does not require as much energy as riding a bike. So when one's income increases, the price of gas will become less of an issue, as well as paying for an automobile itsself, so the demand for the automobile will increase because it is an easier form of transportation compared to the bike.

  43. Yaelon 29 Sep 2009 at 3:56 am

    I believe that my response to this question would change depending on where in the world I live. For example, having lived in Switzerland my whole life, I don't really see the need of having a car because there is so much public transportation available to me that it would almost seem unnecessary to own one. Moreover, Switzerland is generally a clean environment and a lot of people own bikes to protect the environment. Therefore, living in Europe, especially Switzerland, doesn't make me view bikes are inferior goods because they are almost better than cars; they are cheaper and are generally easier to travel with, considering how few people actually need a car to travel when there is so much public transport available. In a country like the US, however, where the land is so spread out, it seems almost impossible to travel anywhere without a car. In this case, bikes can be seen as an inferior good because the gasoline used for the car is, ultimately, more worth paying that traveling such long distances by bike. In fact, in some staes, it is almost necessary to travel by car. Although bikes can prove to be helpful in large cities in the US such as New York due to the traffic blocking the roads and can therefore be seen as a normal good, on a general note cars in the US are the dominant mode of transportation and see bikes as inferior goods.

  44. sebastianon 05 Oct 2009 at 5:40 am

    When thinking about the bicycle, I first think of it as an inferior good, due to the fact, that once the income of an individual increases, the demand will fall. When I travelled through India two years ago, I saw streets that were crowed with bikers. In this case, the bike is used for transporting goods but not as much for pleasure. On the other side, when looking at Switzerland, an extremely rich country, bikes are manly used for pleasure in form of racing or mountain biking. This reflects that the high oil prices affect poor countries much more than ones such as Switzerland. As we know, the automobile and the fuel are complimentary goods, meaning as the price of oil will continuously increase, the demand for cars will eventually decrease which will result in a decrease in prices of cars. In the process of time, I strongly believe, that the classic bicycle will get even more popular among society as crude oil continuously becomes scarcer.

  45. Sakktion 22 Oct 2009 at 1:58 am

    Inferior goods are products with a negative income elasticity of demand. This means that as income rises, the demand for the product falls. So, for example, a 20% rise in income would lead to a 5% decrease in the demand for a good. This can be possible for bicycles, since bicycles do not have many substitute goods. In addition, bicycles are not a real necessity and it is not a narrowly defined product, since we are just talking about bicycles in general (not about a specific type or brand of bicycle). These determinants prove that bicycles are inelastic products and can be considered inferior goods. However, when looking at bicycles more specifically (a specific type of bicycle or a specific brand of a bicycle) then they can be considered as normal goods, since they are narrowly defined products and there are more substitute goods.

  46. Sarah Ebleon 22 Oct 2009 at 4:06 am

    I agree with Sakkti. Bicycles in general, so not from a specific brand, are inferior goods. Besides they don't have a lot of substitues and are not essentia. Therefore they are inelastic. Whereas a specific bike of a specific brand is very elastic since consumers can easily choose and buy from another bicycle brand because there are so many different brands. There are a lot of substitues now.

  47. Melanie Beilkeon 26 Oct 2009 at 2:23 am

    Bicycles always have been very popular, worldwide. In almost every city in the world there is either a high percentage of people riding bicycles or a low percentage. Personally, I would say that a great amount of the population owns a bicycle. However, it does depend on in which city or country you live in. In Germany or Switzerland you see a greater amount of cars than bikes, in smaller countries like Paris or London you do clearly see that there is a greater population riding bicycles. Even consumers that have higher incomes than most others ride their bicycles, especially when it comes to shorter distances. Even though bicycles are seen quite often, in some countries more than other, I do think it is an inferior good. The Bicycle has many substitutes such as the train, walking or getting a ride by someone else.

  48. Grace Forsython 04 Nov 2009 at 5:44 am

    Bicycles can be seen as both inferior goods and normal goods depending on how it is looked at. When the price of gas goes up less people are going to be driving their cars, bicycles are a substitute for cars and so people may start riding their bikes more often if they cannot afford to drive their cars. When people's income decreases they might not be able to afford gas to drive their cars anymore and so resort to riding a bicycle due to its low costs. This is where a bike could be considered an inferior good. However a bike can be looked at as a normal good as well, if we take for example a famous mountain biker. If this mountain biker wins a race and gets a large sum of money for it, his income will have increased, with this money he may choose to buy another bike as he regards this as a normal or even a luxury good. Another example of when a bike is a normal good is if somebody gets a holiday bonus at Christmas time and use the money to buy themselves or their child a bicycle, this is an example of when ones income rises they buy more of the good. Whether this good is inferior or normal depends on the use of the good and the person that is buying it.

  49. Philip Behrendson 24 Sep 2010 at 4:44 am

    1. Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?

    The prices of substitutes like for example the car have affected the bikes through the rising expenses which were seen when driving a car. As the fuel prices rose, the thought of biking to work became increasingly desirable. This therefore increased the demand for bikes, but with the additional decrease in income, people refrained from buying brand new bikes and therefore invested in second hand bicycles or fixing their old ones. This then meant an increase in demand for bicycle repair shops and second hand bike dealers.

    2. What is the definition of an “inferior good” in economics?Do you believe bicycle transportation is an “inferior good”?

    An 'inferior good' is a good for which demand decreases as general income rises and demand increase as income falls. I agree with the statement and do think that the use of bicycles as a necessity for transportation to and from work as well as other trips normally done by car, is an inferior good. I do not, however think, that the bicycle by itself is an inferior good since people will still by refrain from buying a new, expensive bike if their income is falling. This, is also the reason why there was an increase of people wanting their old bikes fixed, since this was probably cheaper than buying a completely new one.

    3. Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?

    No, bikes are definitely not all the same. In the example above, it is easy to assume that the types of bikes bought, especially in large cities like here, will be commuter bikes, which do the job of carrying one to and from work or school, but nothing more. It is probably also logical to assume that a decrease of demand for bikes with other, special purposes would be seen. Expensive mountain bikes, race bikes or similar will not be as demanded, as these are recreational or hobby items rather than a necessity to respond to the increasing cost of driving by car.

  50. Markel Zuritaon 24 Sep 2010 at 5:03 am

    If the prices of substitutes for bikes such as automobiles and public transportation rise, and the cost of bicycles remains the same; there will be an increase in demand for bicycles. Real income can also influence the demand for bicycles if we see it as a substitute for the goods which are rising in price such as individual cars. Bicycles however, cannot be seen as inferior goods since in different parts of the world, they can both be used to increase satisfaction of the buyer or as a substitute which is cheaper.

    The definition of an "inferior good" in economics is a good which is used to substitute a more expensive good which might not be available to those who could once buy it due to an increase in price. I personally do not believe that bicycle transportation is an inferior good in every case since as we can see in Switzerland; even people with high incomes may purchase bicycles for fitness because of taste or preference even though they are able to buy a machine which could offer the same type of fitness inside their homes. In LEDCs, bicylces can be viewed as inferior goods since they can substitute other forms of transportation such as public transportation.

    Not all bikes are the same. For example, people earning high salaries are able to buy new bikes and pay for other forms of transportation while people with lower salaries are less likely to buy new bikes but are more likely to buy old bikes or purchase resources with which they could make their own.

  51. Sarah Eggeron 24 Sep 2010 at 5:32 am

    1. Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?

    Bikes might be very desirable for different people because of two different reasons. One reason might be that the prices for the bikes substitutes such as cars have risen and therefore a consumer finds it better to spend his money on a bike instead of the expensive car. The price of the bike will not change because the quantity demand for bikes got bigger. If a consumers income changed, for example the comsumer earns more, he/she might feel like they can buy a more expensive bike or find that they are saving a lot of money by still buying an older bike.

    2. What is the definition of an “inferior good” in economics?Do you believe bicycle transportation is an “inferior good”?

    The definition of inferior good is a good that decreases in demand when consumer income rises and which increases in demand when consumer falls. I think it depends on which country is looked at. In a wealthy country bicycles are not inferior goods since people will still buy bikes if their income rises, depending on interest. However, in a less wealthy country this might be the case.

    3. Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?

    No, not all bikes are the same. There are more expensive products and less expensive product in every market. The demand for an expensive bike might be high because it's a good product which is at better quality. When there are changes in income, this might change. If income falls people might still demand the expensive bicycle but know that they can't afford it so the quantity demand for the cheaper bicycle might therefore be higher.

  52. Matt Burnhamon 24 Sep 2010 at 6:39 am

    1. As the price of substitute goods like Cars become increasingly expensive due to scarcity of resources needed for their production; the general consensus is to refrain from buying cars and switch to buying bicycles. However the consumer's income determines whether the consumers' will be buying new bikes or second hand. With the more people switching from cars to bicycles the demand and price will increase causing bike consumers to not buy as many new bikes.

    2. An inferior good is a good that as the income of a consumer increases the demand for that good decreases. I don't believe that bicycles are inferior goods because no matter how rich the country is people will still demand bikes for personal or recreational use. Also as we are pressed more and more on the subject of global warming people will change from their cars and most likely switch to bikes. This applies to areas with high incomes and places with low incomes as well.

    3. Definitely not all bikes are the same, there are hundreds of different types of bikes from street to mountain bikes. The demand for some bikes will respond differently than others because specialized types of bikes will cost more than regular commuter bikes so there has to be an increase income from the consumer to be able to afford the specialist bikes where as the cheap commuter bikes wont be as affected as much.

  53. Chris Bertramon 24 Sep 2010 at 3:35 pm

    1. Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?

    As the bikes are a substitute good for cars, the demand for bikes increases as the price for maintaining a car increased and therefore made it cheaper to use a bike to get to places. In addition to that, the income of the people decreased and as bikes are inferior goods, the demand for them increased

    2. What is the definition of an “inferior good” in economics? Do you believe bicycle transportation is an “inferior good”?

    An inferior good is a good where the demand decreases when the income of the consumers increases. Bicycle transportation is an inferior good as this example shows. As the income of the people decreased, the demand for bicycles increased. If bicycle transportation were a normal good, the demand of bikes would decrease as the income of the consumers decreased as well.

    3. Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?

    I don’t think that all the bikes are the same. If you look at the cheap commuter bikes, the demand for bikes will increase as the income decreases. However, expensive mountain bikes will behave like normal goods as consumers won’t spend that much money on expensive bikes when they have a lower income..

  54. Graham N.on 25 Sep 2010 at 5:47 am

    1. Using the the substitution effect, if prices of substitutes for bikes increase, the demand of bikes should increase. In this case, the increase in the total costs of car ownership (car + maintenance + gas, etc.) has increased the demand for new bicycles as well as repairs of older bikes. The income effect states that as prices rise, consumers feel that they have less purchasing power and purchase less of normal goods, and more of inferior goods. This has caused a similar increase in the demand for bicycles and bicycle repairs, as they can be considered inferior. However, if most bicycle consumers are assumed to be more wealthy, making bikes a normal good, then the demand of bikes should decrease as the nominal incomes of the consumers in this market decrease.

    2. An inferior good is one that consumers purchase more of when their incomes drop, but purchase substitutes of when incomes increase. I feel that bicycle transportation is inferior in most parts of the world where income is low, but not in developed nations. As another commenter pointed out, in China, people switch from bikes to cars as soon as they have the money to do so. This would make bicycles an inferior good. However, in America, unless consumers are extremely poor, an increase in the price of gas would cause less driving and more grumbling, and bicycles function as a normal good.

    3. No, all bikes are not the same. The market is certainly different for $25 used junkers that that of $5000 carbon-fiber mountain bikes. Demand for lower end bicycles should function as an inferior good, as they are a substitute for other forms of transportation. High-end bicycles should function as normal goods, as this product is consumed mostly for the utility it gives the consumer rather than its function as a substitute.

  55. Christophon 26 Sep 2010 at 10:20 pm

    If the prices for complements of bicycle substitutes, such as petrol or train tickets, rise, the demand for bikes will increase. Consumers see bicycles as the next best and cheaper alternative and use the bike more frequently. During rough financial times, the incomes of many people have fallen. The income effect states that consumers with a low income perceive that they have a lower purchasing power, if product prices rise. Consumers with lower incomes try to avoid high maintenance prices for cars, and switch over to bicycles.

    An inferior good is a product for which the demand decrease if incomes increase. In general terms, bicycle transportation is an inferior good. Excluding the poorest countries in the world, consumers will switch forms of transportation if their income changes. Consumers with high incomes will use the car more frequently and use bicycle transportation if they are earning low incomes.

    All bikes are not the same. Hand-manufactured, high quality bicycles are expensive and can be classified as normal goods. As consumers' incomes rise they are willing to pay more for these "unique" products. Everyday transportation bicycles, built in developing countries, cost less act as inferior goods. Their demand will decrease during prosperous times, and will increase if people earn less money.

  56. Thomas Son 27 Sep 2010 at 12:16 am

    1. Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?

    Bikes are a substitute good for cars and therefore the demand for bikes increases as the price for buying a car increased. Because bikes are an inferior good, the demand for bikes increases, as the income of the consumer falls.

    2. What is the definition of an “inferior good” in economics? Do you believe bicycle transportation is an “inferior good”?

    An inferior good is good for which the demand decreases as general incomes rise and the demand increases as income falls. Bicycle transportation is a inferior good, because when the general incomes fall the demand increases, as mentioned in the post. If bicycle transportation were a normal good, the demand would actually decrease as general incomes fall, because consumer had less income to spend.

    3. Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?s

    In my opinion all the bikes aren't the same. The demand for very expensive bikes wouldn't increase as the general income fall. But the demand for cheap bikes would increase as the income of the consumer falls, because in this case bikes are an inferior good.

  57. Alain Meyeron 27 Sep 2010 at 2:10 am

    1. If the price of substitute goods, such as gasoline (cars) and train tickets rise, the demand for bikes will also rise. If one owns a car, it will become increasingly expensive to keep using that good. And so, people will find cheaper alternatives, such as bicycles which will provide them with long term savings. The income effect states that as people's incomes increase, they will consume more goods and potentially more normal goods than inferior goods. Bicycle transportation is inferior, and so people with lower incomes will use bikes more often. People with higher incomes are more likely to use cars.

    2. An inferior good is a good that less is demanded of as people's incomes rise, and as incomes fall, demand increases. Bicycle transportation is most definitely an inferior good, as people who are able to afford cars will almost always drive one. They are quicker for the most part and allow you to use them no matter the weather. Purchasing bicycles themselves is not inferior, however the bicycle travel industry as a whole is.

    3. No, all bikes are not the same. They differentiate by what type of terrain and situations they are suited for, how many gears they have, how big they are, how many extra settings they have and how they are designed. Certainly different bicycle demands are different depending on the bike. If a bike is on the higher end of things, they are going to be on the favorable side of the rising income effect, but then also on the negative side of the falling income effect.

  58. Maphrida Forichion 27 Sep 2010 at 6:10 am

    1. Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?

    When the substitute goods of any product increase in cost, the demand for that particular product experiences a increase in demand, as it becomes seemingly less costly than its substitutes. This is the case with the bicycles, they became more in demand when owning a car consumed a lot of money. People substituted car transportation with bicycle transportation. Because america was experiencing a rise in unemployment, people's income seemed to become less and less. Perhaps the price of petrol didn't increase, but it seemed to have done so because consumers received low income.

    2. What is the definition of an “inferior good” in economics?Do you believe bicycle transportation is an “inferior good”?

    An inferior good is a good that poses as a basic necessity and is directly related to the less wealthy/poorer people in the economy. It is a good which consumers buy more of when their incomes fall. I do believe that bicycle transportation is an inferior good because bicycles are utilized when one cannot afford a car. Even if their cost increases, they will always be cheaper than cars making them still more affordable. During this time period, the demand for bicycles increased.

    3. Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?

    No, not all bikes are the same. Some are used for leisure activities, but the ones being discussed in this case are the basic ones used as substitute transportation. The bikes utilized for leisurely tasks would experience an increase in demand as income increases. And in comfortable situations, the basic pedaling bikes experience a decrease in demand as income increases.

  59. Eamon Emonsta Stensoon 27 Sep 2010 at 3:34 pm

    Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?

    Ithink that the more money you earn the more things you will buy. the more money you earn your more liekly to buy a bike as you have extra income. If you just have engouh to pay for food etc then you wont be buying a new bike.

    What is the definition of an “inferior good” in economics?Do you believe bicycle transportation is an “inferior good”?

    An inferior good is a good that is cheaper than a normal good. An example would be Getting Heinken vs Coop Premium Beer. This is due to the taste and the cost. I think that Bicycle Transportation can be both, If you live in America than it would be an Inferior good as once your 16 you will more than likely have a car so the bike is pointless. If you live in a country such as Holland or china then i think the bike is a means of transport. People use the bike on a regular basics.

    Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?

    Every bike has the same mechanics. You pedal it and it goes. The thing that some bikes have that makes it special is the weight, the style, the gears and brakes so the bike goes quicker, slow breaks better. Also you have mountain bikes were specialise in mountain biking so i do think the more money you make you will buy a higher end bike but this is with your taste and preferences.

  60. NPon 27 Sep 2010 at 7:26 pm

    1.Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?

    Demand for bikes increases as the price for buying a car increased because bikes are a substitute good for cars. Demand for bikes increases, as the income of the consumer falls because bikes are an infirior good.

    2.What is the definition of an “inferior good” in economics?Do you believe bicycle transportation is an “inferior good”?

    An inferior good is a good where the demand falls when the income of the consumers rises. Bicycles are inferior goods because it is a good that people will turn to and buy when their income falls which leads them not being able to afford a car.

    3.Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?

    Not all bikes are the same . Expensive bikes would not epxerience an increase as the general income falls. But the demand for cheap bikes would increase as the income of the consumer falls, because in this case bikes are an inferior good.

  61. Lisa Con 27 Sep 2010 at 7:30 pm

    1: The price for bikes would not change because the quantity demand will have increased so the producers of bikes are already gaining a profit from the other transportations misfortune. If the price of cars increase people may either just buy one car instead of one, others may consume a bike to save money. If you buy a bike it becomes much cheaper for you to go places. The income of the people decreased and as bikes are inferior goods, the demand for them increased.

    2: The definition of an inferior good in economics is: goods for which a fall in income leads to an increase in demand or a rise in income leads to a decrease in demand. Do I believe that bicycle transportation is an inferior good? Yes, because if prices of other transportation does increase, most of the human Population will resort to buying other sort of transportation, cheaper forms like bicycles.

    3: All bikes are not the same because some of them are designed to carry out different things. There are such things as mountain bikes and then there are normal bikes for a person to ride on a normal day to work. Some bikes are used just for transportation whilst others for other activities. If you receive a lower income that normal and cannot afford, or will struggle to afford a car you will most likely buy a cheaper sort of transportation. In this situation many would buy a bike, or possibly take public transportation.

  62. Konstantin Bon 28 Sep 2010 at 1:43 pm

    1. As prices for fuel increase and transportation by one's own car gets increasingly more expensive the demand for the substitute good – the bicycle – increased. On the other hand, if a person's income decreases he or she cannot spend that much money anymore and has to save some. One way of doing this is by cutting down transportation cost by shifting to the use of bicycles.

    2. An inferior good is a good for which the demand increases when income falls and vice versa. Yes I believe that bicycle transportation is an inferior good as people mostly decide to ride their bikes because they are trying to save money on transportation.

    3. Not all bikes are the same, and so are their demands. For example there is a difference between cheap and expensive, branded bikes. And based on these differences there will also be different responds to a change in income.

  63. Isabelle Yon 28 Sep 2010 at 4:53 pm

    |||||Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?

    An increase in fuel prices means an increase in the costs of personal car transportation. As the prices rice, the demand for cars will fall because people are unwilling to pay that much to support their car-driven lifestyle anymore. Less money will be available for other luxuries (clothes, food , etc) Instead, more and more consumers will choose to go for the substitute good – bikes – so they can maintain other aspects of their lifestyles.

    A decrease in income would mean less disposable income which leads to making choices about what to buy. Consumers will feel pressured to get things as cheap as possible therefore choosing bikes over cars – no fuel prices ! yay !

    ||||| What is the definition of an “inferior good” in economics?Do you believe bicycle transportation is an “inferior good”?

    An inferior good is something that people only buy because they don't have enough money to buy the 'better' alternative (like homebrand chips instead of lays). Eventually the demand for these inferior goods disappears when the average household income gets high enough.

    I don't agree that bicycle transportation in an 'inferior good'. Some people may still choose to ride bicycles instead of cars because they just like it – here the deciding factor is the individuals tastes and preferences. Some people may take bike riding as their hobbies.

    ||||| Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?

    Nope. Not all bikes are the same. Like every product there'll be a range in quality, prices, sizes and designs available to consumers. Some bikes could be seen as 'cheap' while others could be seen as 'luxury' bikes. These different factors will determine how the bike responds to changes in income.

    eg. If someone has an increase in income, they may splurge on a luxury bike instead of buying a 'cheap' bike.

  64. Keun-Hoon 28 Sep 2010 at 5:31 pm

    1. Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?

    Ans) The substitutes for the bikes is when car is too expensive to use. They use the bike instead of the car. When income rise, if the good is inferior good, the income rise, however the demand for the bike will fall. If it is a normal good, then the income goes up and the demand will go up too. since the bike is normal good, the demand will go up.

    2. What is the definition of an “inferior good” in economics?Do you believe bicycle transportation is an “inferior good”?

    Ans) Inferior good is when goods for which a fall income leads to an increase in demand or a rise in income leads to a fall. I think it is a inferior good because today the income for the people are falling, however the demand for car is falling, but bike is going up

    3. Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?

    Ans) Yes. the cheaper ones and the expensive one for demand is very different. People want to buy the expensive ones because they think that it has more better quality than the cheaper ones

  65. Geoffroy the Frenchion 29 Sep 2010 at 3:54 am

    1. Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?

    Well the fact that the price of fuel went up means the price to own a car goes up making it more expensive. However with a decreasing income paying more seems not to be the wisest choice. Bikes are substitutes that cost much less, appealing to a consumer that has a income which can barely afford car transportation but very easily afford a bike.

    2. What is the definition of an “inferior good” in economics?Do you believe bicycle transportation is an “inferior good”?

    Bikes are not rescission proof good rather than a inferior good. An inferior good is a good in which demand actually decreases as income rises, and demand increases as incomes falls, meaning that the rich people don't own bikes, which is untrue. Surely the demand will go down as income rises as bike will most likely become more of luxury then a need (transportation) but never the less there would still be a demand of bikes if everyone was a millionaire.

    3. Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?

    Not all bikes are the same, that is certainty, some are more luxurious(more recreational) then others . AS income decreases cheap bikes that are sturdy might have a higher demand while as the income of consumers goes up the demand for expensive speed bikes with all the useless features goes up.

  66. Beatrice Benderon 30 Sep 2010 at 6:07 am

    1. Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?

    The income effect of the consumers play a role as to when their income decreases their demand for bikes will increase, because they will no longer be able to pay for the petrol for their cars. Therefore the demand for bikes will rise and the demand curve will move outwards. On the other hand if the prices increases for the substitutes of bike such as cars, the demand will be dropping for cars, hence moving the demand curve inwards, but for the bike market there will be an outwards movement.

    2. What is the definition of an “inferior good” in economics? Do you believe bicycle transportation is an “inferior good”?

    An inferior good in economics means that this is a good that gains demand when the income decreases of the consumers and likewise the other way around, when the income increases the demand will drop again. I do believe that bicycle transportation is an inferior good, because as we can see in America when the oil prices were extremely high, peoples wages/incomes were low and bikes acted as the "inferior goods" to the consumers and this was when the demand for bikes increased.

    3. Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?

    Of course all bikes are not the same within the bike market there are different firms which might be well known and therefore have higher prices. It depends on the wheels, guarantee and what type of bike you get e.g. mountain bikes are more expensive than a normal bike. Therefore if the incomes of consumers are low, they would most likely buy a simple bike rather than a expensive mountain bike. So even within the bike market there will be a difference between the types of bikes and depending on their prices and the consumers income the demand will either rise or drop.

  67. Francesca Perversion 30 Sep 2010 at 8:21 pm

    1. If the prices of substitutes for bikes for example automobiles and public transportation rise, and the cost of bicycles remains the same there will be an increase in demand for bicycles. As incomes increase, people will consume more goods and more normal goods than inferior goods. Bicycles are inferior, and so people with lower incomes will use bikes more often. People with higher incomes are more likely to use cars. For those who use bicycle transportation, their income determines whether they will buy new bicycles or second hand bicycles.With the more people switching from cars to bicycles the demand and price will increase causing bike consumers to not buy as many new bikes.

    2. Inferior goods can be viewed as anything a consumer would demand less of if they had a higher level of real income. This occurs when a good has more costly substitutes that see an increase in demand as the society's economy improves. An inferior good is the opposite of a normal good, which experiences an increase in demand along with increases in the income level. I I don’t think that bicycles are inferior goods because no matter how rich people is, will still demand bikes.

    3. All bicycles are not the same. people earning high salaries are able to buy new or better bikes and pay for other forms of transportation while people with lower salaries are less likely to buy new bikes but are more likely to buy old bikes or purchase resources with which they could make their own.

  68. Philippaon 01 Oct 2010 at 5:28 am

    Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?

    Bicycles and cars are substitute goods as methods of transportation. As the price of cars and the petrol for the car has increased, the demand for bicycles, as an alternative method of transportation, has increased. This shows that bicycle transportation is inferior to owning a personal car; those with higher incomes will purchase a car, those with lower incomes will use bicycles as a way of traveling. However, bicycles can also be seen as normal goods. As the consumer’s income increases, the consumer may use the money to buy a new recreational bike e.g a mountain bike. This shows that as the consumer’s income increases, the demand for bikes will also increase. This is the relationship between income and demand for normal goods.

    What is the definition of an “inferior good” in economics? Do you believe bicycle transportation is an “inferior good”?

    Inferior goods are demanded less as the peoples’ income rises and are demanded more of as income falls. Bicycle transportation could be an ‘inferior good’ because they are demanded more of (as seen in the article) as prices of petrol and cars increase. If one’s income was falling, spending money frequently on petrol or car maintenance would not be ideal. Therefore, one would more likely invest in a bicycle. However bicycle transportation may not always be an ‘inferior good’. Sometimes it may actually be easier to travel somewhere on a bicycle rather than in a car. For example, if you didn’t want to sit in traffic, or if there was a shortcut where cars were not able to go or if you had to pay congestion charge or parking i.e in big cities like London.

    Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?

    Bicycles are definitely not all the same. The ones with more gears, better suspension, additional settings, or a more comfortable saddle are obviously going to be more expensive than the standard bike with two wheels, a saddle and handle bars. The different types of bike that suit different terrain also vary in price, for example a racing bike or a mountain bike compared to the bicycle with a basket at the front which you ride to your local store. As income falls, the cheaper ‘bicycles with a basket’ are going to be demanded more than the more expensive, newest mountain bike.

  69. Roberton 01 Oct 2010 at 9:35 pm

    Cycling may be an "inferior good," but I'd argue that in many ways it is an artificial inferior good in America. The car culture is so heavily subsidized (drivers don't pay for pollution, don't pay the full price of gas or parking or infrastructure, etc.) that its cost is artificially low and driving is artificially attractive. In addition, reckless driving is so widely tolerated by the culture that the "cost" of cycling is artificially inflated by fears of being victimized by someone else's illegal and antisocial behavior.

    Any economic analysis of cycling has to look seriously at the incentives that are in place.

  70. Pilar Mulleron 05 Oct 2010 at 5:23 pm

    1. Income, of course, plays a huge role in determining which goods or services will be bought. If the consumers are seeing that automobile prices are rising, they will have to switch over to other transportation methods like bicycles or public transportation. Since automobiles are considered normal goods, as the income rises demand will increase at the same time. However, if that is not the case, some consumers will want to switch over to renting or buying bicylces to commute in a city.

    2. The definition of an "inferior good" is that as income of a consumer rises, he/she will be consuming less of that particular inferior good. I would not consider a bicycle being an inferior good. Of course, it might not have the same level like a car, but still I would consider bicycles to be the cheaper alternative of a "normal good". If we now look at "car transportation" or "bicycle transportation", surely the latter would fall into the category of being an inferior good.

    3. No, I do not think that all bikes are the same. Bicycles can be REALLY expensive. There is such a huge bicylce spectrum ranging from mountain bikes to normal city bikes. Therefore, I would say that demand for different bicycle models will be different depending on the bike's features.

  71. Katrina S.on 14 Nov 2010 at 3:26 am

    1. The price of a substitute for a bike is pretty expensive, if not in money, than in time. An alternative mode of transportation, such as a car, is exceedingly more expensive than a bike. A train, however, isn't expensive in the short-term (i.e. the cost of a one-way ticket), but if a commutor uses the train regularly, costs can build up. Walking is free, but is a lot more time-consuming. Because incomes, in general, have been decreasing, the bike as a mode of transportation has become much more attractive. It is inexpensive, and efficient for short trips. The lower income of consumers make the common costs of a car foreboding. The gas money, insurance, and maintenance costs of a car make the bike an attractive mode of money-saving transportation, which makes the demand for bicycles go up. The fitness craze also makes bike-riding a bit more desireable.

    2. An inferior good is described as one for which its demand goes down as the consumer's level of income goes up. I believe that bicycle transportation is an inferior good because if a less time consuming and easier mode of transportation is available, but is also more expensive, people will choose that good, instead, when their budget allows.

    3. Not all bikes are the same. Some, such as mountain bikes, are exceedingly expensive because they are meant for athletes and serious bicyclists that don't just bike to go to the convenient store. Other, more generic bicycles, cost less and apply to a larger group of consumers. In days of economic prosperity, I believe the demand for the sporty bikes would go up because consumers would have more money to spend on a hobby. Conversely, when incomes go down, the demand for a generic bike as a mode of transportation might go up because of its financial efficiency.

  72. […] Jason Welker at 11:06 pm under Determinants of Demand,Product markets,Substitutes,Supply/Demand I feel like I’ve been here before. Gas prices are rising, approaching $4 per gallon. American drivers are freaking out, demanding the […]

  73. […] Is bicycle transportation an “inferior good”? […]

  74. Vincent Wengon 10 Oct 2011 at 4:30 pm

    1. Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?

    —As the price of substitutes for bikes rise, people would rather buy bikes than other transportation, because the bikes become more attractive to consumers.

    When the income of bike consumers rise, which means their real income rise. As real incomes rise, demand for the bicycle transport will fall.

    2. What is the definition of an “inferior good” in economics? Do you believe bicycle transportation is an “inferior good”?

    —Inferior good is something you don’t want to buy when you get richer, those things are usually very cheap and imply the owner’s low status. I believe that bicycle is an inferior good, because in now a day’s society, riding a bike usually means you are poor, so people would like to get rid of it when they get richer.

    3. Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?

    —No. Although most bikes are very cheap, however, Some bikes use for racing are very expensive. Demand for this kind of bikes responds differently to changes in income than demand for other bicycles. When the riders’ income rise, they will hunt for a better bike. So the demand for this kind of bikes will rise.

  75. […] Is bicycle transportation an “inferior good”? […]

  76. Nicole and Wen Wenon 02 Oct 2012 at 1:12 pm

    1. Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?

    The rise of income in consumers causes them to buy more bikes or buy more expensive and better bikes compared to before. For the substitutes of the bikes, which are cars, whose price of its complementary good, petrol and gasoline has risen, thus it reduces the quantity demanded by consumers and more would opt for bikes as the substitute product. In the first case, bikes are seen as normal goods because as income increases, quantity demanded increases as well. In the second case, it is seen as an inferior good compared to a car thus when income increases, the quantity demanded of the bikes reduces as people would want to purchase a car.

    2. What is the definition of an “inferior good” in economics?Do you believe bicycle transportation is an “inferior good”?
    An inferior good is a good that decreases in demand when consumer income increases. When compared to vehicles like cars, it can be seen as an inferior good as a main medium of transportation.

    3. Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?
    No, there are better quality bikes such as mountain bikes. Yes, demand for some bicycles do respond differently to changes in income because the lower range bikes can be seen as inferior goods compared to the better quality ones. Thus, for the lower range bikes, as income decreases, demand increases; if income increases, the demand for better quality bikes increases.

  77. annonymouson 02 Oct 2012 at 3:44 pm

    Both the price of substitute goods and income affect demand for a particular product. How have both the prices of substitutes for bikes and the income of bike consumers influenced the demand for bicycles in different ways?
    When the incomes of the bike consumers fall, the demand for bicycles bicycles as a normal good decreases. However, the demand for bicycles as transportation; an inferior good, then increases.

    What is the definition of an “inferior good” in economics?Do you believe bicycle transportation is an “inferior good”?
    An inferior good is a good that is in high demand due to the fall of incomes. I do believe that bicycle transportation is truly an inferior good because the increasing prices of motor vehicle transportation has caused the demand of bicycle transportation to increase.

    Are all bikes the same? Do you think demand for some bicycles responds differently to changes in income than demand for other bicycles?
    Not all bikes are the same. I do think demand for some bicycles respond differently to changes in income than demand for other bicycles.

  78. elementary esl lesson plans foodon 26 Nov 2014 at 3:12 pm

    elementary esl lesson plans food

    Is bicycle transportation an ?inferior good?? | Economics in Plain English

  79. Miss T. ESLon 28 Nov 2014 at 7:22 pm

    Miss T. ESL

    Is bicycle transportation an ?inferior good?? | Economics in Plain English

  80. entertaining solutions to teach English to them. Whilst working Hard don

    Is bicycle transportation an ?inferior good?? | Economics in Plain English

  81. car accident prank just for laughson 03 Dec 2014 at 11:56 pm

    car accident prank just for laughs

    Is bicycle transportation an ?inferior good?? | Economics in Plain English

Trackback URI | Comments RSS

Leave a Reply

You must be logged in to post a comment.