We usually don’t like change, but hey...sometimes it’s not so bad. Income changes = when income increases or decreases.
Income changes result in the “income effect,” which is how changes in income result in changes in buying behavior, and in the demand for goods.
For instance, a positive income change might mean we just increased our disposable income. With more fun money in our pockets, we’re likely to spend more money on “normal” goods...things like coffee, clothes, and luxury goods. With normal goods, demand for them goes up when income changes are positive. It’s normal to buy more of them when you can.
When income changes for the better, we’re also more likely to buy less inferior goods. With inferior goods, demand for them goes down with positive income changes. You might upgrade your bus commute to a car commute with higher income, which would make the bus an inferior good. Inferior goods become a thing of the past with enough positive income changes.
Related or Semi-related Video
Econ: What is Disposable Personal Income...1 Views
And finance Allah shmoop What is disposable personal income It's
not the pennies you throw into a dumpster because they're
not worth the extra weight in your pocket And it's
not one hundred dollar bills you usedto light your Saturday
night bonfires The term disposable personal income refers to the
amount of money you have left over after paying taxes
Your net pay the amount you have remaining Teo you
know spend however you want Well it's the fourteen of
the month payday You get the first of your bi
monthly paychecks Your salary is fifty two grand a year
In theory you should get two grand for each two
week pay period right You have twenty six of them
on to grant the thousand dollars a week roughly that
you're earning But in practice that's not what you get
to spend Some of the money comes out as taxes
The party here paycheck that you can actually deposit in
the bank on Lee comes to thirteen hundred thirty dollars
Yep you start with two grand six hundred seventy then
comes out as taxes Federal state county whatever And you're
left with thirteen thirty That number is your disposable income
will disposable personal income or D P I Is an
economic stat tracked by the U S Department of Commerce
It's part of a series of figures that gauge the
wealth of consumer spending at least the ability to spend
the more disposable income the more consumers have to spend
the more money to slosh around in the economy Well
of course Ah the amount of that disposable income you
actually get to have fun with you know used to
light bonfires and such Well that depends on how much
money you make out of the disposable personal income You
still have to pay for necessities you know like rent
and food and the Internet and frappuccinos You know the
basics If you're poor well that stuff takes up most
storm or than all your disposable income You get a
little raise and now you're disposable incomes three grand a
month Out of that you have to pay your basic
expenses right Your mortgages fifteen hundred bucks You spend five
hundred dollars a month on food You have utilities like
electricity and the Internet And you know all that stuff
comes to around two hundred bucks at another hundred bucks
for gas because you don't drive it Tesla at two
hundred bucks for your car payment because you bought an
expensive car Well you're already up to twenty five hundred
dollars in bills and you haven't even bought your first
Frappuccino What will you d'oh well by the end of
the month there isn't a whole lot left over after
that three grand you took in you know for clothes
or insulin or something well your cousin does a little
better he's a veterinary proctologist and pulls in ten thousand
dollars a month in disposable income you know those guys
make bank well his expenses are a little higher than
yours three grand a month mortgage payment thousands wait for
food three fifty for utilities two hundred for gas for
fifty for the car payment you know all told his
expenses come to five grand a month but that represents
only half his disposable income he still has another five
grand to go spend on trips to vegas our tickets
to hamilton or you know just save well your other
cousin is really doing well she's a famous tv chef
and she brings in a one hundred fifty grand a
month in disposable income Will her necessities are much more
expensive Fifty grand in mortgage on her mansion thirteen grand
a month for her household staff Five grand a month
for the top and food flown in You know fresh
still alive and kicking a grand for utilities Ten grand
for her fleet of car payments Eight hundred a month
for fresh cut rose petals to sprinkle around her bath
each morning Yeah and the two hundred dollars a month
she pays to her veterinary proctologist cousin to take care
of her cats Hemorrhoids All told eighty grand in monthly
expenses yet more than twice your yearly total disposable income
Yeah she has another seventy thousand dollars each month on
top of that amount which still needs to be disposed
of Maybe she'LL take her cat on a nice spa
vacation Tio let whiskers forget about his You know back
side issues for awhile Yeah we could only hope Yeah
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