Income Elasticity of Demand (YED) Calculator

Calculate income elasticity of demand (YED). Determine if goods are normal necessities, luxuries, or inferior products as household incomes rise.

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How to Use Income Elasticity of Demand Calculator

  1. Enter initial household income (Y1) and new income (Y2).
  2. Enter initial quantity consumed (Q1) and new quantity consumed (Q2).
  3. Review the YED coefficient and goods classification.

Income Elasticity Concept

YED measures consumer sensitivity to income shifts: YED = (%ΔQ) / (%ΔY).

Frequently Asked Questions

How do you interpret YED values?
YED > 1 indicates Luxury goods; 0 < YED ≤ 1 indicates Normal Necessities; YED < 0 indicates Inferior goods.