Once upon a time, I was a college student in music school and needed to purchase a metronome. A traditional old-style metronome is a handsome accessory to a home, much like a mantel clock. The problem is that these are expensive, and they don’t travel well, even though musicians often need to tote them around with their other equipment.
I needed an inexpensive, portable model, and found it in a local music store. The same manufacturer who produces the upscale models also markets a plastic version. Lightweight, durable, and portable, these little plastic metronomes were (and still are) available in a variety of colors, just for fun. Today, the “color” feature is everywhere in computers and personal electronics. But at the time, the colorful metronome was a novel idea for a fairly stodgy piece of equipment—it’s a miniature pendulum that clicks, tells you when you have lost all sense of counting, and need to try again. Annoying but necessary. I went shopping.
Looking at the array of metronome colors on the store shelf, I asked the price. They were $30.00 each. In 2005 terms, that’s close to $132.00. I balked, but needed one and plunged ahead.
“What color?” the shopkeeper asked.
“Anything except the obnoxious day glow orange,” I told him. I wanted the classy burgundy one, or the black, and said so.
“You can have the orange one for $20.00,” he offered.
“Deal,” I said, mentally holding my nose. He was having trouble finding someone to take the horrible thing off his hands, and I was poor enough to be willing to buy it.
I had made my first independent purchase of an inferior good.
No, the metronome worked fine. An inferior good is one that you purchase because you are under very restrictive income constraints; you would make a different choice if you had more money to spend. It does not imply that the good is necessarily damaged or deficient in any functional way.
Given that beauty is in the eye of the beholder, there will always be some items that have difficulty finding a home, regardless of prevailing tastes. These are the stuff of which salvage stores, clearance sales, special deals, and bargain basements are made. Once incomes rise, the customers of these bargain outlets frequent them less often, and choose the items they really prefer in regular retail stores.
If you purchase ground beef instead of steak when your cash flow is low, ground beef is an inferior good for you. Likewise if you rent videos to limit spending, instead of seeing the films at double the price in a theater, videos may be an inferior good for you. How do you know? If your budget demands that you forego the movie altogether without the cheaper video alternative, the video version is an inferior good. As incomes rise, we buy less of a good (perhaps video rentals) if we think of it as inferior.
Purchases of inferior goods make up a very important area of market activity. People with limited disposable incomes buy less-preferred, cheaper goods, because they cannot readily afford the more expensive, more-preferred items. When merchants recognize that a good is less desirable for some reason, they often discount to attract buyers.
Thus one can find beautiful dining sets—unpopular styles, or with a table scratched or chair missing—at steep discounts over other sets, day-old bread and soon-to-expire canned and fresh goods, and late or out-of-season clothing, at clearance centers and discount areas in regular stores. Both merchants and consumers benefit. The fact that ugly, used stuff then gains a half-life of decades, via garage sales and consignment stores, is also a good thing for budget-restricted consumers.
I still have the orange metronome, with its nuclear glow intact, and I think I still dislike the color. But as the price inflation calculator reveals, my savings were significant. There were other, unexpected benefits. While other people’s attractively colored metronomes often went missing, no one (seemingly) wanted to steal mine. I have since strategically purchased a purple blender, and several other (ugly) items.
As a footnote, the manufacturer thought better of that orange metronome, and dropped it in favor of more sedate and tasteful choices. I may be one of the few current owners of the brilliantly colored version. Is it still inferior, or would I buy one again today? I just might.