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Why do cigarettes have a negative income elasticity of demand?

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A2A. Theoretically speaking, cigarettes are regarded as an inferior good, meaning that income and quantity demanded have an inverse relationship. The underlying assumption is that cigarettes are a good associated with poverty. read more

Theoretically speaking, cigarettes are regarded as an inferior good, meaning that income and quantity demanded have an inverse relationship. The underlying assumption is that cigarettes are a good associated with poverty. read more

Normal necessities have an income elasticity of demand of between 0 and +1 for example, if income increases by 10% and the demand for fresh fruit increases by 4% then the income elasticity is +0.4. Demand is rising less than proportionately to income. read more

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