What characterizes an inferior good?

An inferior good is defined by the relationship between demand and consumer income. Specifically, as a consumer's income rises, the demand for an inferior good decreases. This is primarily because consumers tend to opt for higher-quality substitutes when they have more disposable income. For example, if someone typically buys instant noodles because they are more affordable, they might switch to fresh pasta or gourmet meals when their financial situation improves.

This behavior illustrates the fundamental characteristic of inferior goods: their consumption decreases as consumer income increases. Unlike normal goods, which see increased demand with rising income, inferior goods are associated with a shift towards more desirable purchasing options as economic conditions improve.

In times of economic downturn, consumers may rely on these inferior goods more, leading to increased demand for them as their purchasing power diminishes. However, that particular aspect is separate from the direct characterization of what makes a good "inferior" in economics. The key trait is truly the inverse relationship with income levels.